Lookman scored a hat-trick as his Italian club Atalanta won the Europa League final against Bayer Leverkusen in Dublin in May and earlier in the year helped Nigeria reach the Africa Cup of Nations final in the Ivory Coast.
He netted three times at the AFCON tournament.
"This award is a blessing, to be recognised as best player in Africa is something incredible," he said.
"Four years ago my career fell down but now I'm here as the best player in Africa. Don't let your failures stop your dreams."
Lookman was named ahead of Morocco's Achraf Hakimi, Serhou Guirassy of Guinea, Simon Adingra from the Ivory Coast and South Africa goalkeeper Ronwen Williams.
The award is voted for by a panel that includes national team coaches and captains, but no details of the voting tallies were immediately provided.
Lookman is the seventh Nigerian to take the award and succeeds last year’s winner Victor Osimhen.
Nwankwo Kanu (twice), Emmanuel Amunike, Victor Ikpeba and Rashidi Yekini are the other previous Nigerian winners.
Zambia's Barbra Banda was named African Women’s Player of the Year.
Two years ago she was left out of the squad for the Women’s Africa Cup of Nations finals on gender eligibility grounds but was cleared by FIFA to compete at the 2023 Women’s World Cup and played at this year's Paris Olympics.
Men's awards:
Player of the Year: Ademola Lookman (NGR)
Club Player of the Year: Ronwen Williams (Mamelodi Sundowns/RSA)
Goalkeeper of the Year: Ronwen Williams (RSA)
Young Player of the Year: Lamine Camara (SEN)
Coach of the Year: Emerse Fae (CIV)
National Team of the Year: Ivory Coast
Club of the Year: Al Ahly (EGY)
Best X1: Andre Onana (CMR); Achraf Hakimi (MAR), Kalidou Koulibaly (SEN), Chancel Mbemba (COD); Mohammed Kudus (GHA), Sofyan Amrabat (MAR), Franck Kessie (CIV), Yves Bissouma (MLI); Mohamed Salah (EGY), Victor Osimhen, Ademola Lookman (both NGR)
Women's awards:
Player of the Year: Barbra Banda (ZAM)
Club Player of the Year: Sanaa Mssoudy (FAR Rabat/MAR)
Goalkeeper of the Year: Chiamaka Nnadozie (NGR)
Young Player of the Year: Doha El Madani (MAR)
Coach of the Year: Lamia Boumehdi (TP Mazembe/COD)
National Team of the Year: Nigeria
Club of the Year: TP Mazembe
Best XI: Andile Dlamini (RSA); Michelle Alozie, Osinachi Ohale (both NGR), Lebohang Ramalepe, Karabo Dlamini; Linda Motlhalo (all RSA), Rasheedat Ajibade (NGR), Ghizlane Chebbak (MAR); Barbra Banda (ZAM), Asisat Oshoala (NGR), Tabitha Chawinga (MAW)