The 19-year-old star pipped fellow youngsters Harvey Elliott and Max Aarons to the award - which sees him go into the history books as part of an impressive list of past winners.
Olise has been a hugely influential creative outlet for Veljko Paunovic's side this season, playing his part in 42 of 44 league games to date.
The French youth international has racked up an impressive six goals and ten assists with two games left of the current campaign.
The shortlists for the awards ceremony were revealed earlier in the week, and the ceremony itself was broadcast live from 7:30pm on Sky Sports Football this evening.
The attacking midfielder kicked off his season with a first professional goal when he volleyed home during a 2-0 win over Barnsley back in September.
Since then, he has gone on to net against Blackburn Rovers, QPR, Norwich City, Sheffield Wednesday and Derby County.
He is one of just six players this term to reach double figures in the assists table, and his ability to pull goalscoring opportunities from nowhere has been pivotal to the Royals having the sixth highest goals tally thus far.
Olise is now recognised alongside the likes of Ollie Watkins, Jude Bellingham, Ryan Sessegnon and Aarons who all took home the same award in previous years.
The decision to hand Olise the prize was debated at length by an expert judging panel who deemed the Royals player the best young player in the Football League.
A huge congratulations to Michael from everyone at Reading Football Club on two brilliant acheivements!