The second annual Global Teacher Prize went to Palestinian teacher Hanan Al Hroub who works with children who have grown up exposed to violence.
Hanan Al Hroub was given the prize at a ceremony in Dubai.
Pope Francis said: "I would like to congratulate the teacher Hanan Al Hroub for winning this prestigious prize due to the importance that she gave to the 'playing' part in the education of the children."
"I did it, I won!" as she received her award.
"I am proud to be a Palestinian female teacher standing on this stage. I accept this as a in for all teachers in general and Palestinian teachers in particular.
"Each day, the role of the teacher is reinforced and its importance confirmed as the world questions what future we want for our children."
Hanan Al Hroub grew up in the Bethlehem refugee camp, and was regularly exposed to violence and she decided to go into teaching primary aged-children after her own children were left traumatised from witnessing a shooting on their way home from school.
She promotes the slogan "no to violence" and uses a specialist approach with children that she developed herself, which she has written about in her book We Play We Learn.
It involves developing trusting, respectful and affectionate relationships, encouraging youngsters to work together, and rewarding positive behaviour.
She says she will spend her winnings, around £630,000, on helping students and teachers around the world to progress in their education and careers.
Winners are required to remain working as a classroom teacher for at least five years as a condition of winning the award.
Actors Matthew McConaughey and Salma Hayek paid tribute, as well as the Duke of Cambridge Prince William and a number of politicians.
This year's finalists were drawn from around the world, including the UK, Pakistan, Kenya, Palestine, the USA, Japan, Finland, Australia and India.
