An £8m building based on a series of courtyards, cloisters and verandas that step up across its hillside site has been recognised for its good design.
Judges with the Dewi-Prys Thomas Trust said the Wales Institute for Sustainable Education (WISE) project was a "fantastic" creation.
It is on the site of the Centre for Alternative Technology (CAT) in Machynlleth, Powys.
Previous winners include the Senedd, home of the Welsh assembly in Cardiff.
In all 52 nominations were submitted for the 2012 prize with the winner picked from a shortlist of seven.
The award is named after teacher and architect Dewi-Prys Thomas, who was known as an advocate for Wales and its environment.
The latest prize is for the scheme which, in the judges' opinion, has contributed most to improving the Welsh environment or the understanding of it between 2009 and 2012. The main prize is for a building but there are also commendations for other fields.
According to trustee Jonathan Vining, the tri-annual prize is unique in two ways.
"It's the breadth and its scope as it rewards fields other than just architecture, it's also tri-annual and so looks at things in a slightly wider context," he said.
Danny Harris, the special projects officer at CAT, said several things made the WISE building special.
"It's a very low energy building both in the low energy materials used to build it and in the energy it takes to run it.
"It also pioneers some fairly new materials. In particular the bio-composite walls made of hemp fibres with a lime binder and that's been very successful with very good thermal insulating properties."
The building is used as a conference centre and education facility and is also available to hire for events such as weddings.
"It's been brilliant so far with both local and national organisations [using it] and it seems to go down well as a venue," said Mr Harris.
He believes the design also makes it a nice place to work.
"It's been laid out to benefit from heat and light, which makes it a much nicer, better, learning environment, and it minimises the time when you have your lights on and it lowers your heating bills," he added.
The Dewi-Prys Thomas Prize of an engraved silver medal - sponsored by Tata Steel - was presented to CAT by Plaid Cymru AM Dafydd Elis Thomas in the education room at Ruthin Craft Centre on Friday.
Ruthin Craft Centre is also a previous winner of the award.