Farrell, currently England's reserve fly-half, has been nominated alongside New Zealand pair Richie McCaw and Dan Carter, plus current France number 10 Frederic Michalak.
The short-list will cause consternation in some quarters.
Among the many deserving cases not nominated are inspirational Argentina captain Juan Martin Fernandez Lobbe, Wales flanker Dan Lydiate - last season's RBS 6 Nations player of the tournament - Australia back-row star David Pocock and All Blacks number eight Kieran Read.
Wales, despite being 2011 World Cup semi-finalists and 2012 Six Nations champions, have not had a player nominated for the second successive year.
Farrell, the 21-year-old son of England assistant coach Andy Farrell, is expected to replace an injured Toby Flood against New Zealand at Twickenham on Saturday.
It will be his first Test match start since losing his place to Flood during last summer's South Africa tour.
No-one, though, can seriously question the inclusion of three-time IRB player of the year winner McCaw, while his team-mate Carter took top honours in 2005.
The winner will be announced at next Monday's 2015 Rugby World Cup pool draw in London, together with IRB coach of the year and team of the year.
The panel of judges comprised Will Greenwood, Gavin Hastings, Raphael Ibanez, Francois Pienaar, Agustin Pichot, Scott Quinnell, Tana Umaga and Paul Wallace, under Australian World Cup-winning captain John Eales' chairmanship.
IRB chairman Bernard Lapasset said: "As ever, the competition has been fierce and the panel had a tough time deliberating the shortlist from a number of stand-out candidates.
"All four players on the shortlist thoroughly deserve their place after stand-out performances during the year and consistency in the tough environment that is Test rugby."