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Created in 1978, the purpose of the prize is to reward an activity of outstanding merit in accordance with the ideals of Simón Bolívar (1783-1830). He was one of the most prominent political figures in the emancipation of South America from the Spanish empire for his leading role in the independence of Colombia, Ecuador, Peru and the Bolivarian Republic of Venezuela; and for his contribution to the founding processes of the present-day republics of Bolivia and Panama.

Bolívar called for the freedom of slaves and the distribution of land to the indigenous people, and he proposed the Latin American Union. As a symbol of South American independence, he is referred to as the "Liberator", and his progressive ideas and emancipatory actions have inevitably made him the "Great Man of America".

The prize is intended to reward an activity of outstanding merit which has contributed to the freedom, independence and dignity of peoples and to the strengthening of a new international economic, social and cultural order. Such activity may take the form of intellectual or artistic creation, a social achievement or the mobilization of public opinion.