Goodwin, 44, was bestowed the award by his pedagogical peers after steering the Demons back to the last Saturday in September for the first time since 2000 and claiming the club's first minor premiership in 57 years.
The former Crow blitzed the field with 258 votes and finished ahead of his direct opponent for this year's Grand Final in Luke Beveridge who finished 65 votes behind Goodwin.
The steward's lead in seeing the Redlegs rise from the ladder's 17th rung in 2020 to the top this season saw him enter the night as the red hot favourite for the gong. However, upon receiving the award, Goodwin was quick to share the praise.
"Although it’s an individual accolade, ultimately it reflects the efforts of our entire footy club," he said.
"It is the sum of all parts that come together to create a strong football club and I certainly wouldn’t be receiving this award without the support and assistance of everyone who plays a role at the Melbourne football club."
With 2021 once again throwing a myriad of obstacles back onto the plates of club leaders each and every day, AFLCA chief executive and former Demon Alistair Nicholson commended Goodwin for keeping his charges on track.
"Simon held his head high, worked hard, remained focused and has landed Melbourne in the Grand Final," Nicholson said.
"This award has been determined by more than 120 AFL coaches this year and we know it is held in high esteem."
The accolade is Goodwin's first of his five-year tenure with the Dees and simultaneously marked the first time a Melbourne coach had been honoured.
Other awards on the night were won by Carlton's Luke Power (Assistant Coach of the Year), long-term West Coast employee Ian Miller (Neale Daniher Lifetime Achievement Award), former Eagles' assistant Jaymie Graham (Career and Education Award) and veteran broadcaster Gerard Whateley (AFLCA Media Award).