Governor General's Literary Awards were first presented in 1936 by the Canadian Authors' Association. The CAA did the judging itself until 1944, when an independent Awards Board was established. In 1959 the Canada Council undertook to administer the awards and to provide at least 6 prizes of $1000 each for fiction, nonfiction, and drama or poetry in English and French (previous awards had been for works in English only). That year the category of juvenile literature, which had been established in 1948, was dropped. In 1971 the council assumed responsibility for appointing two 9-member juries - one anglophone and one francophone - drawn from among experienced writers, academics and literary critics. The cash award was raised from $5000 to $10 000 in 1989, and to $15 000 in 2000. New categories have also been added: a separate category for drama (1981); children's literature - text, children's literature - illustration, and translation (all 1988). There now 14 categories, 7 each in English and French. BMO Financial Group has been the major financial sponsor of the Governor General's Literary Awards since 1988. In 2007, as part of the celebration of the Canada Council's 50th anniversary, the prize money was increased to $25 000.

Like any prize, the Governor General's Awards are controversial from time to time; contemporary judgements do not always stand the test of time. There is a general complaint that writers have not always won for their best work, and there are specific criticisms (eg, the failure of Northrop Frye's The Great Code to win an award in 1983). Some winners have refused to accept the award for political reasons. Nevertheless the Governor General's Awards are the pre-eminent literary prize offered for single works in Canada. They serve to reward Canadian writers as well as to publicize Canadian writing through the announcement of short-listed nominees and the awards ceremony each fall.