Sheeran is nominated for the first time behind his massively successful ÷ LP, which became the fastest-selling pop album by a male artist in United Kingdom history earlier this year.
The 12-album shortlist is completed by Dinosaur, Glass Animals and The Big Moon.
"They delight in exploring musical possibilities and refusing to be pinned down by genre conventions".
After the full nominations were announced earlier this morning (July 27), William Hill has both Stormzy and Sampha at 4/1 to win the prestigious annual prize, which recognises the best album from the United Kingdom and Ireland over the previous year.More news: Justin Bieber Accidentally Hit A Photographer With His Car While Leaving Church
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This will be the first time The Castle on the Hill singer has made the shortlist, whereas Alt-J will be hoping to collect their second Mercury crown.
The Big Moon will also go head-to-head with Ed for the prize thanks to their album "Love in the 4th Dimension", while Loyle Carner - whose full name is Benjamin Gerard Coyle-Larner - also managed to secure a spot on the shortlist with his debut studio album "Yesterday's Gone".
This year's victor will be announced at a September 14 show in London.