Egypt forward Salah, 26, beat Liverpool team-mate Sadio Mane of Senegal and Arsenal and Gabon striker Pierre-Emerick Aubameyang to the title.
He received the award at a ceremony in Senegal on Tuesday.
"I have dreamt of winning this award since I was a child and now I have done so twice in a row," Salah said.
Houston Dash and South Africa forward Thembi Kgatlana was named Women's Player of the Year.
Salah was voted the BBC African Footballer of the Year for the second time in December.
He scored 44 goals for Liverpool during the 2017-18 season, helping the Reds to the Champions League final before scoring twice for Egypt at the World Cup in Russia.
He has scored 16 goals in 29 appearances across all competitions for Liverpool this season.
Salah, Mane and Aubameyang were joined in the Team of the Year by Manchester United defender Eric Bailly, Manchester City midfielder Riyad Mahrez, Liverpool midfielder Naby Keita and Tottenham full-back Serge Aurier.
On Tuesday, Caf announced Egypt will host the 2019 Africa Cup of Nations.
Africa Best XI: Denis Onyango (Mamelodi Sundowns/Uganda), Serge Aurier (Tottenham/Ivory Coast), Medhi Benatia (Juventus/Morocco), Eric Bailly (Manchester United/Ivory Coast), Kalidou Koulibaly (Napoli/Senegal); Naby Keita (Liverpool/Guinea), Thomas Partey (Atletico Madrid/Ghana), Riyad Mahrez (Manchester City/Algeria); Mohamed Salah (Liverpool/Egypt), Pierre-Emerick Aubameyang (Arsenal/Gabon), Sadio Mane (Liverpool/Senegal)