The Real Madrid and Portugal forward was announced as the winner at Monday's ceremony in Zurich.
Ronaldo beat fellow finalists Lionel Messi and Antoine Griezmann to the new FIFA honour, the trio having topped a shortlist of 23 global stars.
The triumph adds to the Ballon d'Or crown the 31-year-old picked up last month, which was the fourth of his career.
"Wow, wow, wow – it is incredible," Ronaldo said after being presented with the award by FIFA president Gianni Infantino.
"I'm really happy. I tell you 2016 was the best year of my career. I had a lot of doubts, but at the end of it the trophies speak for themselves.
"They show I have lived up to the expectations and I achieved the best I could. This achievement is incredible. I will never forget this year."
Ronaldo claims both of the game's top individual honours after an astonishing year.
He scored the winning spot-kick as Madrid beat city rivals Atletico Madrid in a penalty shoot-out to win the Champions League, having struck 16 times throughout the competition.
Ronaldo also netted a hat-trick in the Club World Cup final as Madrid beat Kashima Antlers 4-2 after extra time in a thrilling contest.
A first major international trophy also arrived with Portugal emerging as the surprise winners of Euro 2016, Ronaldo scoring three times during the competition before suffering an injury in the final against France and willing his team to victory from the touchline.
He scored 55 goals from a total of 57 appearances for club and country across 2016.
In the night's other awards Claudio Ranieri scooped the men's coaching prize after Leicester City's incredible run to win the Premier League title.
