Modric in 2016 helped Real Madrid to their second Champions League title in three years and beat his Barcelona rival Ivan Rakitic to the award.
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Modric was also included in the FIFAPro World11 of 2016 rounding up a remarkable year for the 31-year-old.
He reclaims the award which Rakitic won in 2015.
Modric previously won the award handed out by newspaper Vecernji List in 2007, 2008, 2011 and 2014.
Only Croatia Davor Suker has won the award on more occasion (six) than Modric.
"This prize means a lot to me, it's the fifth time I've received it and it's very special for me because it has a great tradition," Modric told Madrid's official website.
"I want to thank those who voted for me. I have to keep working hard and improving every day. I want to thank those who have helped me to win this award."
In the poll for the award, Modric won with 110 points ahead of Rakitic (80) and Juventus striker Mario Mandzukic (76).