The pop singer from Ely, Cardiff, topped the list following an online vote from a shortlist of 30 greats.
In second place was Blackwood-born James Dean Bradfield of Manic Street Preachers, with musical theatre performer John Owen Jones coming in third.
Sir Tom Jones and Dame Shirley Bassey, finished fourth and fifth respectively.
Picking up his award, Mr Stevens said: "The fact that it's a public vote means a lot to me, so a big thank you to the people who voted."
Twelve judges from a range of musical disciplines selected a shortlist of 30 for the listeners' poll.
Radio Wales editor Steve Austins said: "While I'm a little surprised at the outcome, the people of Wales have spoken and there is no doubting Shaky's contribution to British music history.
"In fact his was the very first record I bought.
"Any winner from such a formidable shortlist is bound to create heated debate but the poll reminds us just how blessed with talent we are here in Wales."
Shakin' Stevens shot to fame in 1981 with the number one hit single This Ole House.
His platinum-selling career spans more than four decades and he is still recording and touring across the world.
Wynne Evans' countdown show on Radio Wales can be heard here.
Shakin' Stevens has been voted Wales' Greatest Living Voice by listeners of BBC Radio Wales.