The 24-year-old Spaniard, who won three Grand Slam tennis titles in 2010, beat out Argentinian football star Lionel Messi, 2010 World Cup hero Andres Iniesta, NBA champion Kobe Bryant and boxer Manny Pacquiao to win Laureus Award, which is considered as Sports Oscar.
"This nomination is voted for by the world of sport ... the best sportsmen and sportswomen in the world voted for me, it's a real honor. It was an emotional season for me, probably the most emotional of my career, so thank you very much for everyone who made this possible for me," Rafael Nadal said after receiving the award.
American skier Lindsey Vonn bagged the sportswoman's award. Vonn won gold medal in the women's downhill and a bronze at the Vancouver Olympics and achieved a third consecutive overall World Cup title.
Spain's football team won the team award for winning 2010 FIFA World Cup in South Africa.
2011 Laureus Awards:
* Sportsman of the Year - Rafael Nadal
* Sportswoman of the Year - Lindsey Vonn
* Team award - Spanish football team
* Lifetime achievement award - Zinedine Zidane
* Action sportsperson award - Kelly Slater
* Comeback award - Valentino Rossi