The Ivory Coast international was honoured at a ceremony in Lagos, Nigeria on Thursday night.
The award, which is handed out by the the Confederation of African Football (CAF), is decided by a poll of African national team coaches and technical directors.
Toure beat off competition from Chelsea midfielder Jon Obi Mikel and Galatasaray striker Didier Drogba to claim the award which was won by Drogba in 2006 and 2009.
The 30-year-old, who has 13 goals in 26 appearances for his club so far this season, ended the year trophyless with City but did help his country to qualify for the World Cup for the third consecutive tournament.
The former Barcelona man joins Samuel Eto'o in winning the award for three consecutive years with the Cameroon star claiming the honour between 2003 and 2005.
Toure was also named the BBC's African Footballer of the Year in December and was the only African to make the 23-man shortlist for the 2013 Ballon d'Or.
"Everyone at the club would like to congratulate Yaya on his fantastic achievement," read a statement on www.mcfc.co.uk.