Modric led his team to the final for the first time, regularly running matches from the heart of midfield.
The 32-year-old was named as the winner ahead of Belgium skipper Eden Hazard and France forward Antoine Griezmann.
Modric is the first player from his country to ever win the award.
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The midfielder scored in the shoot-outs against both Denmark and Russia in the last 16 and quarter-final matches.
In the group stages he scored a stunning goal during the 3-0 thrashing of Argentina.
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