Mr O'Connell was announced as the recipient of the trophy last month.
The event was formally acknowledged during a black-tie event at Botswana Butchery on Thursday night.
The event also recognised the achievements of the inaugural recipients of the Southern Lakes Scholarship scheme, designed to help keep promising young rugby talent in the Otago catchment.
Club secretary Phil Wilson, who nominated Mr O'Connell for the award, praised his contribution to the club.
"Damien (ably assisted by his wife, Kay) has been the driving force in the Wakatipu club for the last four years, but this year Damien's club contribution has been outstanding.
"Over the summer he organised the refurbishment of our clubrooms.
"As the playing season began, our high school rugby administrator resigned due to relocating for work, and Damien took up that job.
"Kay is the junior rugby administrator and Damien assists, as well as having a son playing.
"Typically on a Saturday Damien would assist with his son's team, make sure the high school teams are organised with transport etc, make sure the ground is set up [when Wakatipu was hosting the match] and then play.
"Although Damien is busy running his own painting business, he never fails to volunteer for a job that needs doing.
"He deserves the title of Volunteer of the Year," Mr Wilson's nomination form said.
Otago Rugby board member Andrew Rooney said about 12 nominations were received each year for the Otago Rugby Volunteer of the Year award.
Mr O'Connell's involvement set him apart throughout all areas of the sport, from high school and junior rugby to administration and even lacing up his boots to turn out for the senior team.
"Volunteers are really what keeps rugby going in the provinces.
"We focus on the professional guys a lot and the top end of it, but they are just a small percentage.
"The real [rugby] is the grass-roots level and it's the volunteers that keep that rugby going."
Mr O'Connell would now go on to the National Rugby Volunteer of the Year Awards to be held as part of the Steinlager Rugby Awards on December 1 in Auckland.
