It said the award was ``in appreciation of his history of struggle,'' the agency said.
Previous winners of the award include South African President Nelson Mandela and Louis Farrakhan, the controversial leader of the Nation of Islam.
The prize generally is awarded during celebrations marking the anniversary of the coup that brought Gadhafi to power in September 1969.
There was no word on whether Castro would attend the ceremonies.
The award -- which carries a cash prize of $250,000 -- has been given annually since 1989.
Libya and Cuba have good relations. Both are on the U.S. State Department list of countries that allegedly sponsor terrorism.
MENA said that other contenders for this year's prize were Pope Shenouda III, who is head of the Coptic Christian church in Egypt, and former U.S. Attorney General Ramsey Clark. The agency did not say why they were nominated.
© Copyright 1998 The Associated Press