The award was established on December 15, 1964 for the activities in the fields of fiction, music, theater, fine arts, cinema and journalism in the Azerbaijan SSR.

[2] The first laureates of the prize: Mirza Ibrahimov, Maral Rahmanzadeh, Tofig Kazimov, Tahir Salahov, Gara Garayev, Hokuma Gurbanova, Zeynalov Ali Yusif oglu.

In order to further develop Azerbaijan Soviet socialist culture, especially fiction, music, theater and fine arts, cinema and journalism and to encourage creative workers who are more distinguished in the republic and whose works meet the high needs of the party and the people the government of the Azerbaijan SSR established three awards named after prominent thinker, philosopher and playwright Mirza Fatali Akhundov: 1.

Works for M. F. Akhundov Prize are submitted by writers, composers, artists, cinematographers and journalists' unions, research institutes, theater societies, theaters, magazines and newspaper editorial offices, enterprise collectives, universities, ministries, departments and public organizations no later than three months before the awards are given.

Republican Award Committee named after M. F. Akhundov under the Council of Ministers of the Azerbaijan SSR, established from representatives of public organizations and cultural figures considers the nomination for the award, taking into account the public opinion, and submits its proposals for approval to the Council of Ministers of the Azerbaijan SSR.

On the back of the medal is written: "Laureate of the M. F. Akhundov State Prize of the Azerbaijan SSR" (in Azerbaijani), year of issue and number of the badge.