The Cameroon striker, who enjoyed little success with his country but won the treble with his club Inter Milan last season, becomes the first player to win the award four times.
He finished ahead of Ivory Coast and Chelsea striker Didier Drogba and Ghana and Sunderland forward Asamoah Gyan.
Over to you: Sunderland striker Asamoah Gyan lost out to Inter Milan star Samuel Eto'o (R) for African Player of the Year award
Eto'o won the award three times in a row from 2003 and his latest success means he overtakes other three-time winners Abedi Pele and George Weah.
The 29-year-old was an integral part of Inter's success last term, netting 16 goals during a highly successful campaign under then coach Jose Mourinho.
However, his exploits with the Indomitable Lions were limited as they were bundled out early in both the African Nations Cup and World Cup in South Africa.
In some quarters that made him second favourite to Gyan, whose goal-scoring exploits took Ghana to the World Cup quarter-finals, where they were eventually beaten on penalties by Uruguay.
Missing out: Asamoah Gyan and Didier Drogba failed to win the prestigious prize
Gyan also helped Ghana reach the final of the African Nations Cup, where they lost out to Egypt.
The winner of the award was decided by votes from national coaches of the continent's 53 countries affiliated to the Confederation of African Football (CAF).
Former Ghana coach Milovan Rajevac was named coach of the year, the Serbian seeing off strong competition from TP Mazembe boss Lamine N'Diaye and Egypt's Hassan Shehata.
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