The skilful fly-half joins All Blacks great Richie McCaw as the only player to have retained the award, while Barrett, McCaw and the great Dan Carter are the only three to have won the prize more than once.
Barrett enjoyed another stellar year in international rugby, helping New Zealand retain the Rugby Championship, while he was also a part of the side that drew a thrilling series with the British and Irish Lions 1-1.
The 26-year-old beat a star-studded shortlist including All Blacks team-mate Rieko Ioane, Australia's Israel Folau, and England duo Owen Farrell and Maro Itoje.
— World Rugby (@WorldRugby) November 26, 2017
"I'm very proud and surprised, I wanted to be better than last year and I think I have plenty more to go, so it's exciting," he said at the awards ceremony in Monaco.
"I think the Lions series really put us under pressure, the most pressure I've felt in a Blacks jersey, credit to the Lions, we'll take that to the World Cup.
"One day when I hang the boots up I'll look back and be really proud of this. I have to thank the team, I'm just one player among a great team. I really have to thank them."
Ioane earned the consolation of being named the Breakthrough Player of the Year, while England's Eddie Jones won the Coach of the Year after seeing his side lose just once in 2017.
Photo by: Getty Images. Caption: Beauden Barrett scores for New Zealand