Prime Minister Tony Abbott made the announcement outside Parliament House on Saturday in front of a large crowd of dignitaries and fellow award finalists.
The Swans champion claimed the huge honour for his youth advocacy work and efforts to get more recognition for indigenous people.
"Thank you Australia for this award. It is a huge honour," Goodes said.
Goodes was selected from a diverse field of nominees that represented the scientific and medical communities, the arts and community groups.
The 34-year-old is a four-time All-Australian, member of the Indigenous Team of the Century, and has represented Australia in the International Rules Series.
The Swans' champion is also actively involved with several indigenous sport and community programs, and has spent time working with troubled youngsters, including in youth detention centres.
In a Swans match against Collingwood in May, Goodes expressed his dismay after being called an "ape" by a 13-year-old girl supporting the Magpies late in the MCG clash.
Goodes said he intended to continue to fight racism over the coming year.
"My hope is that we as a nation can break down the silos between races, break down those stereotypes of minority populations," he said.
"I hope we can be proud of our heritage, regardless of the colour of our skin and be proud to be Australian.
"The ultimate reward is when all Australians see each other as equals, and treat each other as equals."
Goodes' mother Lisa, a member of the Stolen Generation, was among those in the crowd for the announcement.