The 65-year-old emerged winner for his short story titled 'The Story of the Girl whose Birds Flew Away.'
It explores the lives of women in Sudan and the violence and harassment they face.
The piece is published as part of a collection of short stories in "The Book of Khartoum - A city in short fiction".
It was written in Arabic and translated by Max Shmookkler
who will receive a share of the £10,000 ($13,000) prize money.
Speaking at the ceremony in London Monday, Al-Fadil said: "This is important for me as I think countries in Africa -- particularly my own country of Sudan, need to do more to promote culture, literature and the arts."
Bushra al-Fadil was chosen as the winner out of 148 entries from 22 African countries.
The Caine Prize for African Writing is regarded as Africa's leading literary award. It was started in 2000 and takes place annually to recognize Africa's best creative writers.
The prize was named after English author, the late Sir Michael Caine, who was Chairman of the Booker Prize management committee for 25 years.
After his death, friends and colleagues decided to establish the prize to be awarded annually in his memory.
, who resides in Saudi Arabia, was a university professor before he was expelled from Sudan in the early 1990s for protesting against a military coup led by the current President Omar al-Bashir.
He holds a PhD in Russian language and literature and has published four collections of short stories in Arabic.