The 28-year-old finished ahead of Mali's Seydou Keita and Ghanaian Andre 'Dede' Ayew in polling by national coaches of the 53-member associations of the Confederation of African Football (CAF).
The full tally of votes was not immediately released by CAF, African football's governing body.
Toure thanked his family, including brother and City team-mate Kolo, in a brief acceptance speech at the CAF awards in Ghana.
"This award is not important for me alone. It's for my country and for my club," he said.
"This is a big step in my career, I'm very thrilled. To be the winner is fantastic."
Toure, the second Ivorian to land the award after twice-winner Didier Drogba of Chelsea, enjoyed a fine year for club and country.
He scored the winning goal in Manchester City's 1-0 victory over Stoke City in the FA Cup final and this season has impressed in his club's rise to the top of the Premier League.
Toure also helped Ivory Coast finish their African Nations Cup qualifying campaign with a 100 percent record.
The midfielder joined City from Barcelona for a fee of around 24 million pounds after the 2010 World Cup in South Africa.
Toure, who had a nomadic early career in Europe, was ever present for his country in 2011.
The Ivorians were the only side to win every game in the preliminaries for the 2012 finals and are among the favourites for next month's competition in Equatorial Guinea and Gabon.
Midfielder Keita, who won the Champions League and La Liga with Barcelona, was runner-up to Toure.
Ayew, whose father Abedi Pele won three African Footballer of the Year awards from 1991-93, finished third.
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.