Shiftin, by Mhairi Owens, was up against entries by poets from as far afield as the United States, China, Canada and Ecuador, writing in English, Scots and Scottish Gaelic.
It is the first time a piece written in the Lowland language has scooped the £1,500 international Wigtown Prize for poetry.
The announcement comes after the Wigtown Prize was opened up to entries in all three of Scotland’s languages for the first time, marking the United Nations International Year of Indigenous Languages.
Ms Owens, who lives in the Fife town of Anstruther, works in the community and tutors in creative writing at the University of St Andrews.
She said: “I was delighted to get the news that Shiftin had won the Wigtown Prize on a dreich Friday night.
“It’s literally a slim wee poem, but uses some very beautiful and unique Scots words and phrases.
“It’s right that many of us who use Scots in our everyday communication should use it in our poetry.”
The poetry prize was launched in 2005 and first ran the following year.
Previously Scots and Gaelic entries had their own separate categories, but the international prize was in English.
As in past years, there were also dedicated categories for the best Scots and Gaelic poems, with top prizes of £500.
Dorothy Lawrenson, from Edinburgh, who scooped the Scots award, welcomed the inclusion of Scots and Gaelic in the top poetry prize.
“It’s fantastic that such a prestigious prize celebrates all three of Scotland’s languages,” she said.
“I wrote my first poem in Scots less than four years ago, so I’m absolutely thrilled by the recognition and hope it will encourage others to have a go at writing in Scots.”
Daibhidh Eyre, from Coatbridge, who is currently teaching English in China, won the Gaelic category.
The second annual Dumfries and Galloway Fresh Voice Award, which celebrates talent linked to the area, was won by Clare Phillips.
Beverley Bie Brahic was awarded the new Alastair Reid Pamphlet Prize for a short body of poems.
The prizes will be awarded at a ceremony on 5 October as part of the Wigtown Book Festival.
“This year has involved a real step change for the Wigtown poetry competition,” said Marjorie Lotfi Gill, chair of Wigtown Book Festival board of trustees.
“The Wigtown Prize is recognised as a significant international award and we are proud that it now provides an equal platform for work in all three of Scotland’s indigenous languages.
“It’s fitting that this year’s winning poem is Mhairi Owens’ wonderful Scots poem Shiftin.”
Asif Khan, director of the Scottish Poetry Library, said: “The Wigtown Poetry Prize has quietly become one of the most important, outward- facing awards in the UK.
“We’re delighted to be associated with it and delighted at the calibre and quality of this year’s entries and winners.”