Netherlands international Van Dijk, who joined from Southampton for £75 million last January, has helped Jurgen Klopp's side establish the best defensive record in the Premier League.
They are second in the Premier League and in the Champions League semifinals, with the 27-year-old's contribution seeing him win the honour.
Van Dijk becomes the second consecutive Liverpool player to win the award after forward Mohamed Salah was crowned Player of the Year 12 months ago.
He is the first defender to win the award since Chelsea centre-back John Terry in 2005.
"I think it's the highest honour you can get as a player to get voted Player of the year by the players you play against every week. It's special. I'm very proud and honoured to win," Van Dijk told Sky Sports.
Speaking earlier this month, Klopp said he felt the defender would be a worthy winner.
"He's had an outstanding season. Will he have deserved it? Of course," he said. "It was last season when Kevin De Bruyne and Mo Salah both played unbelievable seasons and Mo won it.
"We were happy about that, and not because De Bruyne lost it -- because he would have deserved it as well.
"I think it is the same again in this case. It's clear, the same again, I would be really happy for Virgil to win it."
Sterling did not go home empty-handed, however, as the 24-year-old City standout took home the Young Player of the Year Award.
Vivianne Miedema was voted women's player of the year, on the day she won the Super League with Arsenal.
Manchester City forward Georgia Stanway was voted women's young player of the year.