The 30-year-old musician, real name Damon Gough, was the hot favourite to claim the annual award after being backed down to 2/1 from 7/1.
He beat off the likes of Coldplay and former Verve frontman Richard Ashcroft to take the £20,000 cheque.
After receiving the envelope from Jools Holland at London's Grosvenor Hotel, Gough tossed it casually on the floor, before quipping: "I always assumed I was never going to win because good things don't happen to good people normally."
He looked shocked when the announcement was made and as he left his seat admitted: "I am not calling myself a winner - I'm just someone put up here to shake like a leaf."
In a reference to last year's winner, Talvin Singh, he joked: "Talvin, how's your year been, mate - better or worse than before?"
The Manchester performer, who climbed on stage wearing his trademark woolly hat and smoking a cigarette, paid tribute to rivals Coldplay, whose album Parachutes was second favourite to win the prize.
World Cup
"They haven't shut up about me, bless them, and Doves (who were also in contention) have been friends of mine for five or six years."
He added: "Where do you go from here? - It's not the World Cup, but you know..."
Badly Drawn Boy impressed judges with the diverse range of styles on The Hour Of Bewilderbeast - from indie to cocktail jazz.
But Gough was not getting carried away by his success, remarking: "It seems fickle to say but I do not know how to make a song. I'm not like Lauryn Hill saying it's a gift from God. I'll go home tomorrow and I can't write for toffee.
"I'm never getting any better than when I was 18 years old. I still worry about the next level but I thrive on it. I want to go on to the next album and on to the tenth."
Modesty aside, sales of the 18-track album are certain to rocket on the back of his success.
Other contenders in the 12-strong field for the prize, now in its ninth year, included garage star MJ Cole, dance gurus Leftfield and Newcastle folk singer Kathryn Williams.
Primal Scream, Suede and Pulp are among past winners.
Spoof news items on the site included the 'revelation' that "80s chart sensations Buggles have been commissioned to write the theme tune to the awards for the knock-down price of £150".