Salah beat his Liverpool teammate Sadio Mane and Arsenal forward Pierre-Emerick Aubameyang, who play for Senegal and Gabon respectively, to the prize.
El-Hadji Diouf was the previous Red to receive the honour prior to Salah, lifting the CAF award in 2002 in recognition of his exploits at that year's World Cup with Senegal.
I'm very proud to win it twice.
While the Egyptian is keeping the coveted award for the second time in a row, Nigeria's Asisat Oshoala has been dethroned as the best female player on the continent.
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It was a good day for Egyptian football all round, with Egypt being awarded the right to host the 2019 Africa Cup of Nations.
Having defended his Player of the Year title, his next goal will be to match the four straight wins in the competition by former Manchester City and Ivory Coast star Yaya Toure.
The Egyptian had his share of setbacks previous year, too, with an injury in the Champions League final loss to Real Madrid also keeping him out of a World Cup defeat by Uruguay.
Mauritania edged Uganda and fellow AFCON debutantes Madagascar for the Men's National Team of the Year award.
South Africa's Chrestinah Kgatlana, who had a fine tournament at the 2018 AWCON, where the Banyana Banyana lost the final on penalties to Nigeria's Super Falcons, was named the Women's Player of the Year.
The Goal of the Year award also went to Kgatlana.