The dish, called Cream of Manchester, is a meat, black pudding and white pudding pie cooked in half a pint of Boddingtons beer, topped with a mashed potato whirl and served with "Manchester Caviar" (mushy peas) and salt and vinegar sauce.
Its inventor, Paul Yau, a freelance chef, said: "We were asked to use local ingredients and you can't get more local than Boddies.
"I wanted to something that was inspirational to the city. Boddies is something that Manchester can call its own, because it's part of the city's heritage. It'll be sad if it goes."
The winning dish will now be the highlight of the menu for the Lord Mayor of Manchester's annual reception, and also served on the new transatlantic Manchester route run by the airline BMI.
Other winners in the festival were:
Restaurant of the Year - The French Restaurant, the Midland Hotel
Bar of the Year - Kro2
Pub of the Year - The Queen's Arms, Cheetham Hill;
Coffee bar of the Year - The Refectory, Cathedral Visitors Centre
Best Venue Design - Upstairs at the Living Room
Best Manchester cocktail - Something Blu, Atlas Bar
Manchester Food and Drink Festival Outstanding Achievement Award - Paul Heathcote