Fresh Air FM, which is run by students at Edinburgh, Napier and Heriot-Watt universities, was handed the prestigious award by judges from the Student Radio Association. The victory means that the group can now host a special programme on BBC Radio One this Christmas.
Kate Lorimer, a spokeswoman for the station, said: "We are proud to announce that we are now officially the best station of 2004, after beating off challenges from Warwick University, De Montefort University and Southampton University.
"This is a huge achievement for Fresh Air. After financial troubles held the station back for two years, we are riding high on a successful broadcast in April of this year.
"This is not only an award for the students involved, but also illustrates to the rest of Britain how vibrant the music scene is in Edinburgh and Scotland. We are now able to compete successfully against the major players from England, Wales, and Northern Ireland on the radio waves, and it sets the standard for future broadcasts."
The ceremony, which was hosted by BBC Radio One’s Steve Lamacq and Jo Whiley, was held in London last Friday night. There were twelve awards up for grabs, and Fresh Air FM also came close in the best drama category, with its show Bruntsfield Place coming third.
A Student Radio Association spokesman said: "Congratulations to all involved in the station."