The 28-year-old Spanish midfielder got 19 votes while Messi and Ronaldo got 17 votes each. The jury, consisting of 53 journalists from across the continent, takes part in the live poll during the Champions League draw ceremony to choose the UEFA Best Player of the year.
Lionel Messi of Barcelona won the inaugural award last year.
Having scored 73 goals for Barcelona, Messi was a strong contender this year too, and Ronaldo too was not far behind with 60 goals for Real Madrid and helping the team win the La Liga title. However, Iniesta helped Spain win the 2012 Euro Cup with splendid play, and that made the difference. His performance at the World Cup two years ago was also commendable.
Iniesta was handed the UEFA's Best Player of the Year Award at the Champions League draw in Monaco in the presence of Messi and Ronaldo.
"It is a privilege to be in the final three next to Messi and Cristiano Ronaldo, they are unbelievable players. I am very happy to win this award. I would like to thank Leo and all my Barcelona and Spain teammates. This award would mean nothing without them," ESPN quoted Iniesta as saying after winning the award.
Messi congratulated his teammate on winning the coveted award.
"Makes me happy that UEFA has awarded Andres Iniesta, he deserves it. Many Congratulations Andrés!" Messi wrote on his Facebook page.