The book, also longlisted for last year's Man Booker Prize, is a contemporary reimagination of Sophocles' "Antigone".
An urgent, and fiercely compelling story of loyalties torn apart when love and politics collide, Shamsie's work confirms her status as a master storyteller of the contemporary times.
The plot revolves around the fate of the families of Isma, a Muslim student in America, and Eamonn, the son of a powerful British Muslim politician.
Founded in 1996, the annual British award recognises and celebrates the excellence, originality and accessibility in writing by women across the world.
"We chose the book which we felt spoke for our times...It sustains mastery of its themes and its form. It is a remarkable book which we passionately recommend," Sara Sands, the chair of judges of the Womens' Prize for Fiction, said.
"Home Fire" is Shamsie's, a three time awardee of Pakistan's Academy of Letters, seventh book.
She is also a fellow of the London-based Royal Society of Literature and was named a Granta Best of Young British Novelist in 2013.
Her previous work "God in Every Stone" (2014), was shortlisted for the Baileys Prize, the Walter Scott Prize for Historical Fiction and the DSC Prize for South Asian Literature.
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