The Pussy Riot nomination angered many Lutherans and was sharply criticised by a number of prominent churchmen and politicians, who said the band was blasphemous.
The award, founded in 1996 and dedicated to Germans or foreigners "who risk hardship for brave action", carries a € 10,000 cash prize.
The next award will go to a Bavarian anti-racism initiative run by pub landlords called "No Service for Nazis".