The 31-year-old beat off competition from Gabon forward Pierre-Emerick Aubameyang and Nigeria goalkeeper Vincent Enyeama to retain the award and become the first man to claim the continental prize - awarded by the Confederation of African Football - on four successive occasions.
Toure had previously been tied with Samuel Eto'o, who was African Footballer of the Year between 2003 and 2005.
Abedi Pele of Ghana won France Football's African Player of the Year gong in three successive years from 1991, but Toure has now surpassed both men in terms of consecutive triumphs and joins Eto'o as a four-time winner.
In 2014, Toure represented his country at the FIFA World Cup and helped Manchester City to a second Premier League crown, scoring 20 goals in the title-winning campaign, as well as the League Cup.
His latest honour was announced at the 2014 CAF Awards Gala in Lagos, Nigeria.
Porto's Yacine Brahimi, 24, pipped Cameroonian duo Vincent Aboubakar - his team-mate at club level - and Clinton N'jie to the Most Promising Talent award.
Brahimi played a starring role at the World Cup for Algeria as the north African nation impressed in Brazil.
Algeria claimed the National Team of the Year gong, while Kheireddine Madoui, the coach of CAF Champions League winners ES Setif, was named Coach of the Year.
'Obviously Messi is the best player in history and being compared to him means that you're doing things right, but I try to be myself': Barcelona star responds to comparisons with Argentine legend
'Darwin Nunez would be gold for Arsenal': Liverpool legend claims Gunners should have signed Uruguayan striker in January
