José Manuel Caballero Bonald has one the Cervantes Prize. He is a poet, novelist, memoirist, and historian of flamenco. I think he is most well know for his poetry, which has its roots in realism but plays with that.

El Pais has a brief description of his most important works.

A note form El Pais on the announcement and a few other links.

Watch a video of him talking about contemporary poetry.