Mr Elliot (59) was presented with the prize at the Viaduct Events Centre in Auckland earlier this week.
"They contacted me about it a few months ago, but I thought they were asking me to help with the judging," he said at his Port Chalmers home yesterday.
"It's great for illustrators, in general, to get recognised as a creative field. It's traditionally been a poor cousin of visual arts." Elliot works from a studio at the back of his Port Chalmers home which has been converted from an old ship cabin.
"It's nice drawing out here at night and thinking that it's been way out at sea."
The roof beams of the studio bear the signatures of children's book authors, such as Margaret Mahy.
Elliot says he has already decided what to do with the $10,000 prize money "I'm going to spend it on whisky," he jokes.
"Seriously, though, the money will give me a bit of space, to be creative without jumping up and down on my own back."
Elliot has illustrated children's, poetry, short stories, novels and picture books in New Zealand and internationally.
He has written and illustrated five picture books of his own and collaborated with Margaret Mahy on The Word Witch last year and the 2011 New Zealand Post Children's Book of the Year Award winner, The Moon and Farmer McPhee.
He also illustrated many books in the popular Redwall series, by Brian Jacques, and two in the Castaways series.
"If you want to think of something new, you've got to think sideways, rather than straight down the middle. That's the secret to a lot of illustrations." Elliot has two projects in the pipeline at the moment.
"People are taking New Zealand writers and illustrators a lot more seriously now. With the internet, there isn't that tyranny of distance," he says.
"I think New Zealand is a very literary nation. We are real book people, compared with other nations."
The former Queens High School teacher has also been involved in teaching adult art classes and the New Zealand Book Council "Writers in Schools" scheme.