The Local is up against two other sites: DN.se, the website of Dagens Nyheter, Sweden's largest-circulation quality daily, and Dagen.se, a well-known website carrying Christian news.
Explaining why The Local had been nominated, the prize's jury said:
"The simplest ideas are often the best. Anyone could have started a news website about Sweden in English. The Local did it in 2004 and is now attracting 312,000 unique visitors a week from around the world. And it's earning money."
The prize is awarded annually by magazine Medievärlden to "a newspaper company that shows originality, courage and energy in its work with digital media."
Paul Rapacioli, Managing Director of The Local, said he was "thrilled" with the nomination:
"Within Sweden, we have diplomats, senior foreign professionals and a surprising number of internationally-minded Swedes reading The Local, which makes it one of the most valuable audiences in Sweden. Around the world, more people find out about Sweden through The Local than via any other source.
"Advertisers in Sweden have totally understood how to reach this market now and are doing some really exciting things on the site."
Paul O'Mahony, editor of thelocal.se, put the success down to the rapport the site had built up with readers: "We're a daily destination for countless people, both in Sweden and overseas. This nomination shows that the Swedish media world recognizes what an important audience we have built up."
The Local was founded in 2004 and now also runs a site in Germany, thelocal.de. James Savage, Managing Editor of The Local, said the concept works just as well outside Sweden:
"What we do in Sweden works really well, it works well in Germany and will work well in other markets.
"All our journalists are foreigners, but are also immersed in the life of the countries in which they're living. With a true outsider's perspective on society, but with inside knowledge, we can give a fresh angle on what's happening in Sweden, Germany or wherever."
The winner of the prize will be named at a gala in Stockholm on October 1st.