The burly central-defender, who is currently recovering from ankle surgery, has consistently played superbly during his 35 league starts this season and was a unanimous choice.
Shaun Wright-Phillips was runner-up with Robbie Fowler third.
Meanwhile, Nedum Onuoha scooped the Young Player of the Year award after breaking into the City first-team under Stuart Pearce.
Bradley Wright-Phillips was runner-up and third place went to Stephen Jordan, who like Onuoha has been a regular first-team starter under Pearce.
"Stephen Jordan and Nedum Onuoha have both come in a done well and Sylvain Distin and Richard Dunne have been outstanding all season. Dunney in particular has been superb," fellow defender Ben Thatcher said on the City website today.
"They have been one of the better central-defensive partnerships in the league."
"We have real competition for places at the back and we have shown by the goals that we have conceded that we are no pushover," added Thatcher.
The award for the Most Promising Player of the Year as voted by the staff at the City Academy went to Micah Richards.