In a poem called And the World was Calm, Chris Wallace-Crabbe writes: "Poetry survives with its coppery glint of gnosis/ Along one edge/ It is a drug that endures/ Riding atop the bubbles of evanescence."

It is a drug to which he has been happily and healthily addicted since he was a student at the University of Melbourne, publishing his first book, The Music of Division, in 1959. Since then Wallace-Crabbe, 81, has taught and written poetry in the US, Italy and for many years at his local alma mater.

That addiction received further approval on Wednesday when he received the Melbourne Prize for Literature. The award, which is worth $60,000, is in "recognition of his outstanding contribution to Australian literature and cultural and intellectual life" and is for a body of work that consists of more than 30 books.

A rejigged book of selected poems, Afternoon in the Central Nervous System, was published in the US last week.

Previous winners of the triennial prize are Helen Garner, Gerald Murnane and Alex Miller.

Andrea Goldsmith won the $30,000 Best Writing Award, which is given for a single work, for her 2013 novel, The Memory Trap. The novel, her seventh, looks at how memory plays out in the imagination through her central character who returns from overseas to Melbourne after her marriage collapses.

Kate Ryan won the $20,000 Writers Prize for her essay Psychotherapy for Normal People.

When Wallace-Crabbe turned 80 last year, David Malouf told Fairfax Media that his friend's individual voice had always been consistent.

'"You always wonder when a poet publishes young whether he can maintain that engagement with the world," Malouf said.

"His latest poems have as much passion, as much sensory involvement with the world, and as much intellectual engagement with different elements of the world."

Wallace-Crabbe said over the years he supposed his poetry had got wilder. "But there is still a close perception of landscape and weatherscape," he said.

"To some degree there is political interest but it comes and goes like a tide."

He said he was in the middle of a project with the artist Jan Senbergs, a work about six imagined cities.

"They are real cities but we don't know them. There will be large prints and hand-written poems as part of the whole project."

They will be sold as individual sheets, but he hopes for a folio edition.

"And I am looking at the prospect of another long poem that will consider the meaning magic has for all sorts of people."

The Melbourne Prize runs on a three-year cycle, awarding either musicians or urban sculptors in the intervening years.