Sanches will collect the trophy at a ceremony in Monte Carlo on Monday.
The 19-year-old beat club team-mate Kingsley Coman and Manchester United striker Marcus Rashford to the accolade after the trio emerged from an initial 40-man shortlist to form the final three.
The Portuguese signed a five-year deal at the Allianz Arena from Benfica in May and went on to win Euro 2016 with Portugal, playing in six of his team’s seven matches.
The annual prize – established by Italian newspaper Tuttosport in 2003 and voted for by a panel of journalists from around the continent – is given to the player under the age of 21 who has impressed the most over the calendar year.
“I’m beaming and I dedicate the Golden Boy to my family,” Sanches told Tuttosport after the announcement.
“This award has global significance, but I will remain down to earth. I still have much to learn mainly from my fantastic team-mates like Arturo Vidal, Xabi Alonso, Thiago Alcantara and Joshua Kimmich.”
United forward Anthony Martial won last year’s award, following up successes by Paul Pogba and Raheem Sterling in 2013 and 2014 respectively.
Barcelona star Lionel Messi was the winner back in 2005, one year after Wayne Rooney took the honour. Real Madrid’s Cristiano Ronaldo, though, never claimed the prize.