He won the award ahead of last year's winner, Pierre-Emerick Aubameyang and Sadio Mane.
It completed a hattrick of individual honours for the Algerian forward who had already been named PFA players' player of the year and BBC African player of the year.
The skillful winger played a pivotal part in Leicester's shock run to winning the English Premier League last season as he played in all but one of the club's games, scoring an impressive 17 goals.
He won the award ahead of last year's winner, Gabon's Pierre-Emerick Aubameyang (Borussia Dortmund), and Senegal star Sadio Mane (Liverpool).
He joins Rabah Madjer (1987) and Lakhdar Belloumi (1981) as the Algerians to have won the award.
South African club, Mamelodi Sundowns were named the African Team of the Year after winning the Absa Premiership title and the CAF Champions League and representing the continent at the Club World Cup in Japan.
For masterminding the team's exploits, 52-year-old Pitso Mosimane was named Coach of the Year.
The team's Ugandan goalkeeper, Denis Onyango was named African Player of the Year (Based in Africa) beating Zimbabwean teammate Khama Billiat and Zambian, Rainford Kalaba (TP Mazembe).
Nigerian striker, Kelechi Iheanacho was named as the Most Promising Talent on the continent after the breakout year he had at Manchester City. His compatriot, Alex Iwobi won the Youth Player of the Year award for forcing his way into Arsene Wenger's Premier League side, Arsenal.
For winning yet another Africa Women Cup of Nations, Nigeria's Super Falcons were named Women’s National Team of the Year for their record eighth title win in Cameroon.
Leading the charge of that title triumph was Arsenal star, Asisat Oshoala who was named Women’s Player of the Year after finishing the tournament with six goals.
The Cranes of Uganda won the honours for the National Team of the Year while 37-year-old Gambian, Bakary Papa Gassama was named the Referee of the Year.
The winners were picked by CAF member associations' national team coaches, a panel of journalists and television consultants.