She beat out Anya Hindmarch and Luella Bartley to claim the coveted award, which recognises the leading British designer of couture, ready-to-wear, knitwear or accessories.
Organised by the British Fashion Council, the annual awards celebrate the best emerging and established fashion talents within the British fashion industry.
The prizes are decided by a panel of top fashion editors, retailers and influencers and their committee is chaired by British Vogue editor Alexandra Shulman.
Other winners at this year's awards included jewellery designer Tom Binns, Burberry menswear designer Christopher Bailey and Dame Vivienne Westwood, who was honoured for outstanding achievement in fashion design.
The inaugural Isabella Blow Award for Fashion Creator, established in memory of the late stylist, was awarded to production and set designer Michael Howells, who has created backdrops for John Galliano and Christian Dior shows.
Designer Erdem Moralioglu won the £50,000 ($136,000) Swarovski-sponsored Fashion Enterprise Award to help develop his label Erdem.
Full list of award recipients:
DESIGNER OF THE YEAR - Stella McCartney
NEW DESIGNER OF THE YEAR - Christopher Kane
DESIGNER BRAND OF THE YEAR - Anya Hindmarch
MODEL OF THE YEAR - Agyness Deyn
THE ISABELLA BLOW AWARD FOR FASHION CREATOR - Michael Howells
RED CARPET DESIGNER OF THE YEAR - Marchesa
MENSWEAR DESIGNER OF THE YEAR - Christopher Bailey for Burberry
ACCESSORY DESIGNER OF THE YEAR - Tom Binns
THE OUTSTANDING ACHIEVEMENT IN FASHION DESIGN AWARD - Dame Vivienne Westwood
THE BFC FASHION ENTERPRISE AWARD - Erdem Moralioglu
