The 23-year-old was handed the accolade on Saturday by the International Rugby Board (IRB), becoming the fourth All Black to lift the prestigious award.
Retallick has enjoyed a superb year for his country, playing a key part in helping them embark on a record-equalling 17-game unbeaten run - which included winning the Bledisloe Cup and securing a third straight Rugby Championship title.
Retallick made his 35th Test appearance during the 34-16 victory over Wales on Saturday.
He follows in the footsteps of team-mates Kieran Read (2013), Dan Carter (2005 and 2012) and Richie McCaw (2006, 2009 and 2010) in claiming the IRB honour.
Willie le Roux (South Africa), Julian Savea (New Zealand), Johnny Sexton (Ireland) and Duane Vermeulen (South Africa) were also on the five-man shortlist.
Retallick's accolade completed a hat-trick of awards for New Zealand, as the All Blacks were named World Rugby Team of the Year 2014 for the eighth time and Steve Hansen the World Rugby Coach of the Year 2014 for the third year in succession.
World Rugby chairman Bernard Lapasset said in a statement: "Once again, the World Rugby Player of the Year award has been closely contested with each of the five nominees having shone on the international stage in 2014.
"Brodie Retallick has been at the heart of another hugely successful year for the All Blacks with his superb lineout skills, ball carrying ability and work at the breakdown playing a huge role in a June series win against England, the Rugby Championship title and a strong November series.
"New Zealand showed again in 2014 that they are the team to beat in international rugby, demonstrating remarkable consistency and dominance, the likes of which has rarely been seen before. And at the helm is their excellent coach Steve Hansen who has managed to keep his players performing at such a high level, match after match."
New Zealand Rugby chief executive Steve Tew added: "It has been another year where the hard work done by this group has been rewarded on the field with outstanding results.
"We are extremely proud of this team and on behalf of NZ Rugby congratulate Brodie, Steve and the whole team brilliantly lead by Richie [McCaw] and supported by a large group of very committed professionals all of whom unselfishly contribute."