The 35-year-old former Welsh international pipped United team-mates Nemanja Vidic, Rio Ferdinand, Cristiano Ronaldo and Edwin van der Sar to the gong, with Liverpool's Steven Gerrard the other contender on the six man shortlist.
Giggs has only started 12 league games this season. However, he has also featured for the Red Devils in the Champions League, FA Cup and League Cup, and is set to make his 800th appearance for the club in Wednesday's Champions League semi-final first-leg against Arsenal.
While his winner at West Ham in February ensured he has netted in all 17 Premier League campaigns since its inception in 1992.
PHOTO GALLERY: Ryan Giggs Premier League goals
"It's right up there with personal accolades, it's the best to have as it's voted by your fellow players," he said.
"I've been fortunate to win a lot of trophies, I won the young player award twice, but this is the big one.
"It's an exciting season. I think it is going to go right to the wire, there's big game after big game now. That is what you want and need at a club like Manchester United.
"The manager has been massive in my career from when I first met him when I was 13. That's over 20 years and he knows me better than anyone and our relationship has been brilliant and just gets better.
"I've been so fortunate to have such a great career in so many great teams, it's not even worth thinking about what it would have been like without the manager.
"As long as I'm getting picked, enjoying it and injury-free, I'll carry on as long as I can. At 35 you can't look too far into the distance, you just can't."
Aston Villa forward Ashley Young picked up the Young Player of the Year prize.
He fended off competition from club team-mate Gabriel Agbonlahor, as well as Manchester United duo Jonny Evans and Rafael Da Silva, Tottenham Hotspur winger Aaron Lennon and Stephen Ireland of Manchester City.
The teams of the year for the top four English divisions were also announced at Grosvenor House Hotel in London on Sunday night, with Giggs one of six United players named in the Premier League XI.
The dream team also featured Liverpool pair Fernando Torres and Steven Gerrard, Chelsea striker Nicolas Anelka and Portsmouth right-back Glen Johnson.
Premier League team of the year:
Edwin Van der Sar (Manchester United), Glen Johnson (Portsmouth), Rio Ferdinand (Manchester United), Nemanja Vidic (Manchester United), Patrice Evra (Manchester United), Ashley Young (Aston Villa), Steven Gerrard (Liverpool), Ryan Giggs (Manchester United), Cristiano Ronaldo (Manchester United), Nicolas Anelka (Chelsea), Fernando Torres (Liverpool)
Championship team of the year: Keiren Westwood (Coventry), Kyle Naughton (Sheff Utd), Roger Johnson (Cardiff), Richard Stearman (Wolves), Daniel Fox (Coventry), Michael Kightly (Wolves), Stephen Hunt (Reading), Joe Ledley (Cardiff), Jordi Gomez (Swansea), Sylvan Ebanks-Blake (Wolves), Jason Scotland (Swansea).
League One team of the year: Joe Murphy (Scunthorpe), Neal Eardley (Oldham), Jack Hobbs (Leicester), Sean O'Hanlon (MK Dons), Dean Lewington (MK Dons), Fabian Delph (Leeds), Matt Oakley (Leicester),
