A mixture of Nice (or gnarly or any "cool" word with an "n" sound for that matter) and, obviously, Awesome.
Etymology: Invented by Drew Nutter, this word was originally spelt "Nawesome." Drew then decided that just one letter wasnt enough to do justice to the other word (nice, gnarly, or whatever you like) so he added a "G" as in "gnarly" to make it Gnawesome. Soon after, he decided a "K" was a more attractive letter to use, so he made it "Knawesome."
Yo that was so knawesome dudeman