David Bowie has been nominated for the Mercury Prize for his last album, Blackstar, almost seven months after his death.
The record will compete against albums by artists including Radiohead, Skepta and Laura Mvula, as well as The 1975 and Bat For Lashes.
Radiohead received a nod for the hotly anticipated offering A Moon Shaped Pool.
Mvula was praised for her album The Dreaming Room, while rapper Skepta made the list for Konnichiwa.
The 1975's record I Like It When You Sleep, For You Are So Beautiful Yet So Unaware Of It will also compete against Bat For Lashes' The Bride.
The other records to make the list of 12 albums of the year, chosen by the Mercury Prize judging panel were Hopelessness by Anohni, Making Time by Jamie Woon, Made In The Manor by Kano, Love & Hate by Michael Kiwanuka, Adore Life by Savages and Channel The Spirits by The Comet Is Coming.
The list will be shortened to six and a winner will be announced at a ceremony at the Eventim Apollo in London on September 15, which will be broadcast on BBC Four and BBC Radio 6 Music.
The judging panel said of the contenders: "This is music to make sense of our unsettling times - heartfelt, angry, thoughtful, and thrilling. The 2016 Hyundai Mercury Prize Albums of the Year are marked by their musical ambitions, unexpected instrumentation and breathtaking arrangements."
Fans will be able to vote for their favourite to make the final six at www.mercuryprize.com.
Matty Healy, lead singer of The 1975, said it was "humbling" to be named on the same list as Bowie.
He added: "It's crazy just to be invited along and to be with contemporaries we are so in love with, like Skepta."
Healy, who is the son of TV stars Tim Healy and Denise Welch, went on: "Everyone is incredibly proud. It's a very nice surprise.
"Making a second record is a difficult thing to do so we wanted to approach it with the purity we had back in the early days.
"We got rid of thinking about reviews and critics and acclaim and that is what is being recognised."
The band have recently enjoyed huge success in America and secured some well-known fans.
Asked to name the most famous person in his phone, Healy replied: "Probably Taylor Swift but she's probably changed her number by now."
He joked: "I keep texting her."
Skepta's shortlisted debut album was give a huge boost when Adele tweeted about it, referring to him as "Tottenham Boy".
Reflecting on what that meant to him, he said: "I was ready to quit that day. What it made me know was that being myself was the best thing I could have ever done.
"For Adele, for another artist who goes through the same things as me, knows how hard it it.
"I love how she keeps herself to herself, she is not in the papers, she's not excited by other stuff. She knows it's a blessing but she tells us how to treat her.
"She tells us 'Don't run after me, don't pap me, don't follow me, don't take me for these other artists."
However, that does not mean there is a collaboration on the cards.
Skepta said: "We are both on the planet, hopefully something can happen, but there are so many artists that I thought 'When I meet them I want to collaborate with them'. But sometimes that's not why you're meant to meet.
"You're meant to give each other a good life talk or push you in a better direction. Always going for the collaboration spoils it and I don't want to spoil it."