The big-hitting Pietersen polled almost twice as many votes his team-mate Flintoff, the winner of the inaugural award in 2004.
Pietersen's success continued a tremendous night for the 25-year-old, who was also named as Emerging Player of the Year.
Accepting his award, Pietersen said: "It's been a whirlwind, the last 12 months. I'm just thrilled to be here, and I thank all the people that have helped me in achieving this success."
ICC President Ehsan Mani said Pietersen was a worthy winner as his "brand of aggressive batting thrilled crowds and television audiences alike and his success is reflected in the number of votes he finished ahead of his nearest rival in the poll."
During the voting period Pietersen played 21 One-day internationals and enjoyed a spectacular level of success, scoring 786 runs at an average of 87.33 with three hundreds, all against South Africa, and four other scores of 50 or more and those runs were made with a remarkable strike-rate of 99.49 runs per hundred balls.
Australian trio of Adam Gilchrist, Brett Lee and Andrew Symonds were the other closest nominees behind Flintoff in the category. The ODI Player of the Year was one of eight individual and team honours handed out during the ICC Awards, presented by Hyundai in association with FICA.
All the nominees for the one-day player award have been included in the ICC Limited overs team for 2005 which would be skippered by Sri Lanka's Marvan Atapattu, who pipped Australia's Ricky Ponting in the bid.
The event, held at the Four Seasons Hotel, recognises cricket's star performers over a 12-month period starting from August 1, 2004 to July 31, 2005.
Pietersen received the trophy from Sunil Gavaskar, the former India captain, opening batsman, member of the voting Academy and Chairman of the ICC Awards Selection Panel.
The trophy, produced by Swarovski, features a crystal cricket ball studded with over 4200 Swarovski crystal chantons, cusped in a hand which extends from an aluminium base. The hand represents the theme of "breaking through" in pursuit of excellence.