The 29-year-old Sinclair led Canada to bronze at the London Olympics in spectacular fashion, scoring an Olympic-record six goals to win the Golden Boot. She recorded a hat trick in a 4-3 extra-time semifinal loss to the United States.
The Burnaby, B.C., native had 23 goals and six assists on the year for Canada.
"I'm just in shock," Sinclair said on a conference call. "I can't believe first of all, the year I've had and the year my teammates had. And then to have this continue on, it's incredible, especially to have a female soccer player in Canada win this award."
The honour — decided by a panel of national sports editors, reporters and broadcasters — is given annually to Canada's outstanding athlete by the Toronto Star.
Other finalists for the Marsh award were speedskater Christine Nesbitt, trampolinist and Olympic gold medallist Rosie MacLennan, figure skater Patrick Chan, cyclist Ryder Hesjedal and Calgary Stampeders running back Jon Cornish.
Sinclair was Canada's flag-bearer at the closing ceremonies in London. According to the Canadian Soccer Association, Sinclair contributed to 65.9 per cent of her team's scoring in 2012.
She said head coach Jon Herdman deserves plenty of credit.
"I know he brought back the passion and the love of the sport within me," she said. "He had me believing that absolutely anything was possible as an individual soccer player and he's the first coach in a long time that has had the veteran players on the team learning new things.
"It hasn't happened in a long time and I think he deserves the credit for the way that I performed this year and the way the team performed."
Sinclair's 143 career international goals rank third all-time and second among active players behind American Abby Wambach (148).
Sinclair was suspended four matches by FIFA, the sport's governing body, for comments she made after Canada's semifinal loss to the U.S.
She was recently snubbed for FIFA's women's player of the year award. Wambach, American Alex Morgan and Brazil's Marta were on the shortlist after a vote by national team coaches, captains and reporters.
Sinclair has been on the shortlist six times in her career, but she has had an outstanding 2012 making this year her best shot at the Ballon d'Or.
Chan took the Lou Marsh honour last year.
The award is named after a former Toronto Star sports editor.
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