The international jury of technology experts said that the OU course was "one of the best examples of distance learning seen to date".
They also said it "could serve as a model of quality for other institutions to follow".
The course supplements the traditional kit of real geological materials with CDs which allow students to examine rocks, minerals and fossils in three dimensions, and to take virtual field trips.
"A rationale we followed from day one was that if a book was better than a computer, we'd use a book, and if a computer was better than a book, we'd use a computer" said team leader Dr Iain Gilmour.
More than 450 entries competed for the award. Annual EuroPrix awards aim to promote the development of multimedia technologies in seven different categores. The winner entries were announced in Finland in November.