(CNN) -

The 2012 Nobel Prize for Physiology or Medicine was awarded Monday to Sir John B. Gurdon and Shinya Yamanaka for work that revolutionized the understanding of how cells and organisms develop.

The Nobel Assembly's announcement at the Karolinska Institute in Stockholm is the first for what will be a series of prizes announced this week. The Norwegian Nobel committee will announce the most anticipated of the annual honors -- the Nobel Peace Prize -- on Friday in Oslo.

Gurdon, 79, of Dippenhall, England, and Yamanaka, 50, of Osaka, Japan, share the prize jointly "for the discovery that mature cells can be reprogrammed to become pluripotent" -- the ability of a cell to differentiate into another cell type, according to the Nobel committee.

Gurdon discovered in 1962 that the cells are reversible in an experiment with an egg cell of a frog. Yamanaka discovered 40 years later that mature cells in mice could be reprogrammed as immature cells, the committee said.

"These groundbreaking discoveries have completely changed our view of the development and cellular specialisation. We now understand that the mature cell does not have to be confined forever to its specialised state," the Nobel Assembly said in a statement following the announcement.

"Textbooks have been rewritten and new research fields have been established. By reprogramming human cells, scientists have created new opportunities to study diseases and develop methods for diagnosis and therapy.

The prizes created in 1895 by Swedish industrialist Alfred Nobel honor work in physics, chemistry, literature and peace. Economics was added as a category in 1968, and the first prize awarded for economic sciences was in 1969.

The monetary award that accompanies the Nobel Prize was lowered by the foundation this year by 20% from 10 million Swedish kronor ($1.5 million) to 8 million kronor ($1.2 million) because of turbulence that hit the financial markets.

On Tuesday, the committee will announce its award for achievement in physics. The next day, the winner of the Nobel Prize in chemistry will be announced.

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Prize for medicine first to be announced