Juanita McLauchlan's artwork Mandaymanday or 'string of stars' features a blanket embellished with possum fur, embroidery and coins.
The unique work caught the eye of the judges at the Sydney Contemporary, and has claimed the $15,000 prize.
Her work stood out in a big field of more than 500 artworks by Australian and international artists exhibited at Sydney’s old Carriageworks factory.
Mandaymanday is about family and culture, the artist said.
"I like to add my children and my husband into my work in a way that I know they are there, but other people don’t need to know," she said.
Her five children are represented by fabric squares and her husband by a possum pelt.
McLauchlan says the artwork is bringing together her European and Aboriginal heritage in a "nurturing moment of healing".
"The woollen blanket [is] the European side of my family, and the Aboriginal side of my family, the possum skin."

Mandaymanday took more than 30 hours to make.
McLauchlan explains that the coins are about culture “and no one understands the meaning of culture until it's sort of missing but now is the time of truth telling and acknowledging how valuable our stories are.”
Some of the dye created lines on the blanket that are also symbolic.
“You've got these beautiful dark lines going up and its sort of like spears," she said.
"But there's this idea that stories are broken or lost but it's continued, because its sewed into a running stitch.
"It’s about ... picking up those bits of information when you're able to."
Burramattagal man and judge Sebastian Goldspink says the artwork stood out because it is beautiful and tells a story.
“When you hear Juanita talk about the work you get a real sense of emotion and that thing that First Nations people really experience," he said.
"That is, a closeness within your own family and a larger sense of family in community ... and this work is a perfect encapsulation of that."
McLauchlan also currently has an exhibit at the Art Gallery of New South Wales.
It is called yilaa minyaminyabal maaru-ma-lda-y or 'soon everything will be healing' and is her first state art museum exhibition.
The $15,000 acquisitive prize from the art fair will see her work Mandaymanday bought and displayed in the Sydney office of the MA Financial Group that funds the prize.