The Croatian-born short-story writer and novelist lives in Montreal and teaches creative writing at Concordia University.
He joins U.S. author Marilynne Robinson, Israel's Aharon Appelfeld and China's Yan Lianke on the list for the award, an offshoot of Britain's better-known Man Booker novel-of-the-year prize.
The finalists were announced Thursday at the Jaipur Literary Festival in India.
Novakovich is known for his depiction of violence and for writing about the Yugoslav war and its atrocities.
Prize organizers note that his three short-story collections "Yolk," "Salvation and Other Disasters" and "Infidelities: Stories of War and Lust," all contain work that is darkly comic.
Other finalists include Lydia Davis of the United States, Pakistan's Intizar Husain, France's Marie NDiaye and Indian writer U.R. Ananthamurthy.
Russia's Vladimir Sorokin and Swiss writer Peter Stamm round out the list.
The Man Booker International Prize is awarded every two years for a lifetime's work and is open to fiction authors of all nationalities whose work is available in English.
Previous winners of the $95,000 award include Canada's Alice Munro, Nigeria's Chinua Achebe and Philip Roth of the United States.
This year's winner will be announced May 22 in London.
A publicist for Concordia University said Novakovich was travelling all day Thursday and unavailable to comment.
A biography on the Man Booker Prize website notes that Novakovich studied medicine in Serbia before moving to the United States.
He continued his studies in psychology and then in creative writing, at Vassar College and Yale University. A Concordia publicist says he joined the faculty at the Montreal school in July 2009.
— With files from The Associated Press