The association annual awards for 2011 also presented prizes to author Dinh Kinh for his novel Huyen Thoai Tau Khong So (Legend of the Ships with No Register Numbers), poets Do Doan Phuong and Dinh Thi Nhu Thuy and late professor Hoang Ngoc Hien for work on literary criticism and theory.
Khanh, 80, won the same prize in 2003. His novel Bring Rice to the Pagoda was published by the Women's Publishing House and has created a stir in the local literary scene.
The novel was highly acclaimed by not only literary critics but also the wider reading public.
The novel, which sold out its initial print run and was reprinted two more times during a three-month period, has also won acclaim for explaining the origins of Buddhism in Viet Nam.
"Writing about Buddhism is difficult work, but Khanh did not hesitate to choose this subject," said literary critic Nguyen Thi Minh Thai.
Khanh said he drew on many of his personal experiences to write the novel.
"I was inspired to write the novel when I was in hospital about 35 years ago," said Khanh. "At that time, I shared a room with a monk. The monk was cared for by a military officer who used to be a novice monk at the sick man's pagoda, and this officer came to look after the senior monk every day."
The novel highlights the role of Buddhism in tough times, especially during Viet Nam's struggle for independence.
Two prizes for poets Phuong and Thuy reflected the absence of a poetry prize being awarded during the past three years, according to poet Nguyen Quang Thieu.
Phuong, deputy editor-in-chief of Vietnam News Agency's Culture&Sports newspaper, was recognised as a talented young poet, receiving a prize for his poem Hoan Ca (Joyful Song).
Phuong's collection of 100 poems was written in a simple style, and were highly introspective. "Life is naturally quiet and I try to feel the value of this quietness," Phuong said.
"I'm lucky because I'm young. The Viet Nam Writers Association in recent years has paid more attention to young poets. So, the prize for me also reflects a belief in the young generation of writers."
The awards ceremony will be held on Viet Nam Poetry Day next month at the Van Mieu Quoc Tu Giam (Literature Temple) in Ha Noi.