The award was named after Vance Palmer, a leading literary critic.
Palmer wrote reviews and presented a program called Current Books Worth Reading on ABC Radio.
He also wrote books about Australian cultural life, including National Portraits (1940) A.G. Stephens: His Life and Work, (1941) Frank Wilmot (1942), Old Australian bush ballads (co-authored with Margaret Sutherland) (1951) and The Legend of the Nineties (1954).
He was appointed in Chairman of the Advisory Board of the Commonwealth Literary Fund in 1947.
Winners of the Overall Victorian Prize for Literature have a blue ribbon ().