In a statement issued by the sports' controlling body, the International Association of Athletics Federations (IAAF), the organisation said that the two athletes had been crowned during the celebrations of the World Athletics Gala hosted by the International Athletic Foundation (IAF) Honourary President Prince Albert II of Monaco and IAF & IAAF President Lamine Diack.
Bolt, who already won the award last year, won gold medals in the 100 and 200m with world record times at the world championships in Berlin earlier this year.
"It's been an amazing season, but also a trying season. To be named athlete of the year is such a great honour, it shows that all the work we put in pays off," Bolt is quoted as saying.
Richards, who won the female award for the second time after 2006, dominated the field in the 400m, setting seven of the top ten times over the distance this year and winning her fist world title.
"I was asked if this feeling would be the same as being World champion and it really is. Considering the other athletes I was up against this year, I know this must have been a really tough decision," she said.
American Clyde Hart won the Coach of the Year award, while German freelance journalist Gustav Schwenk won the inaugural IAAF World Journalist Award.