The Barcelona beat out teammate Lionel Messi and Real Madrid forward Cristiano Ronaldo for the individual honor.
The 28-year-old shined as Blaugrana endured a frustrating campaign throughout, seeing their Liga title surrender to archrival Real Madrid and crashing out of the Champions League semifinal.
However, he was able to help his country retain its European Championship crown in Ukraine and Poland in June and July, and was subsequently named the best player at the tournament.
And he has now scooped another award, pipping the Argentine and Portuguese forwards, despite their respective 73 and 60-goal campaigns.
"Without my teammates at the Spanish national team and Barcelona I wouldn't have won this individual trophy," Iniesta commented.
His captain at the club level, Carles Puyol, was quick to congratulate the Albacete-born Iniesta on his official Twitter page, writing, "Congratulations, Andres!! You deserve this."
Iniesta received 19 votes from the panel, while Messi and Ronaldo were both given the nod by 17 voters.
In last year's edition of the award, Messi was named as the best player in Europe, with fellow Barcelona star Xavi and Ronaldo finishing in second and third place respectively.