The award was decided after a live poll conducted by journalists from UEFA's 53 member countries during the Champions League draw ceremony. Iniesta, 28, was also named Player of the Tournament at EURO 2012.
Iniesta bagged 19 votes to pip favourite Messi, who won last year's inaugural prize, picked 17 votes along with Ronaldo.
"Without my team-mates at the Spanish national team and Barcelona I wouldn't have won this individual trophy," Iniesta said.
"I feel very privileged to be part of this generation of Spanish footballers."
The playmaker, also known as the 'Puppet Master' for his sublime skills and control of the ball, has won every honour with Spain and club Barcelona. Iniesta also helped Spain win the FIFA World Cup 2010 after scoring in extra-time to beat Netherlands.
However, despite all the success over half a decade, Barcelona missed out on last season's La Liga title to rivals Real Madrid, while the Catalans were also denied in the semi-finals of Champions League by champions Chelsea.