The winning work is a sail almost three metres high, intricately woven from yellow and brown dyed pandanus leaves and titled Dhomala (pandanus sail).
Speaking through an interpreter, the senior Yolŋu artist said her father learnt to make woven sails from Makassans and she would watch him weaving them too.
"I was with my sisters when I found out about winning, we were very happy, it makes us proud to get first prize," she said.
The sail is also a symbol of the historic relationships between the Yolŋu people and the people of Makassar, now Indonesia, which precede European colonisation.
Curator Rebekah Raymond told AAP the work exemplifies the technical skill of the master weaver.
"It is a work that just shows a senior artist at their best and highest level," she said.
The Telstra National Aboriginal & Torres Strait Islander Art Awards (NATSIAA), the longest running and richest indigenous art prizes in Australia, were awarded in Darwin on Friday night, with the winning artists from all over Australia.
South Australian artist Betty Muffler won the painting award with Ngangkari Ngura (Healing Country) 2021, a large monochromatic painting of repeated lines and concentric circles.
The artist from Indulkana in the APY Lands only began painting in her late 70s and has previously won the NATSIAA emerging artist prize.
"I am proud to be in the Telstra and I am happy," she said through an interpreter.
Garramilla/Darwin artist Gary Lee won the works on paper award with a portrait of his grandfather, Juan (John) Roque Cubillo, who was killed in the first bombing of Darwin.
"It's very humbling, I am very overwhelmed, but I am very happy at the same time," he said.
Torres Strait artist Jimmy John Thaiday won the multimedia category with a five minute video, titled Beyond the lines 2022.
The video features frigate birds and a whale shark, and the artist sitting on a sandbar facing the sea.
"I am pretty stunned, what can I say? My art piece is all about climate change and the sea and the culture that I do," he said.
Louise Malarvie, from Kununurra in WA, won the Emerging Artist Award with a large painting in earth pigments on canvas, suggesting the effects of rain and floodwaters on the Great Sandy Desert.
Ms Malarvie said it was amazing to win.
"I think about it all the time and I can't believe I did it with my hands, it came from me, inside of me," she said.
Pamarr Yara 2022 was painted with pigments from her mother's and father's country, and based on the stories of her ancestors.
The late Ms D Yunupiŋu won the Bark Painting Award, with the judges offering their condolences to her family and the Yirrkala community.
Her painting in bush ochres and recycled printer ink tells the story of her spiritual connection to mermaids.
Her son, Witiyana Marika, said he is proud and happy she has won.
"Thank you beautiful mum I love you and I will always miss you," he said.
Bonnie Burangarra and Freda Ali Wayartja from Yilan, NT, won the Wandjuk Marika Memorial 3D Award with An-gujechiya 2021, a weaving from burny vine, bush cane and kurrajong.
The Telstra National Aboriginal & Torres Strait Islander Art Awards (NATSIAA) runs August 6 to January 15 at the Museum and Art Gallery of the Northern Territory in Darwin.
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