Nicolas Mathieu has won for only his second novel, Leurs enfants après eux (Their Children after Them).
Mathieu, a former journalist, said on Tuesday he was “thrilled” to have won the award.
The 40-year-old author said he spent "18 months locked in a room" to write the book, described as an “educational novel about disillusionment”.
It is a coming-of-age story that focuses on a group of adolescents in a fictional town in eastern France in the early 1990s.
Set over four summers, the novel follows the friends as they dream of escaping a dreary industrial town where the blast furnaces have fallen silent.
Their parents fare no better - one of their fathers ihas been laid off from his idustrial job and scrapes by on work as a gardener while bitterly drinking his sorrows away.
"I wanted to tell the story of the world I come from," Mathieu explained.
His first novel Aux animaux la guerre (Animals at War) also deals with the impact of globalisation in a declining French town,
The Prix Goncourt is worth only a symbolic 10 euros but it guarantees huge sales and unbeatable publicity for the winning author.
Theb40,000-run of Mathieu's novel has sold out but the publisher says 50,000 more will now be printed.