"I would like to congratulate Liu Xiaobo, who has been awarded the 2010 Nobel Peace Prize for his work to promote democracy and human rights," Stoltenberg said in a statement.
"Liu Xiaobo has been awarded the prize for defending freedom of expression and democracy in a way that deserves attention and respect," he added.
The secretary of the Nobel committee, Geir Lundestad, said last month China's Vice Foreign Minister Fu Ying had warned him when visiting Oslo that attributing the prize to a Chinese dissident would be interpreted as an "unfriendly gesture" that could harm Norway-China relations.
On Friday, Chinese foreign ministry spokesperson Ma Zhaoxu confirmed the warning, saying in a statement that Liu's Peace Prize would "damage Sino-Norwegian relations".
Stoltenberg meanwhile stressed his country's "close and extensive cooperation with China".
"Our ties are longstanding and cover all the areas that link our countries together. Discussions of human rights issues are part of these relations," he said.
He added that Norway had raised Liu's case "with the Chinese authorities on several occasions".
The five members of the Norwegian Nobel Committee, who pick the Peace Prize laureate, are appointed by Norway's parliament but are independent of the government and the legislature.