The FCB skipper is the Bundesliga's sole representative in the side, which is otherwise made up of eight players from Spain's La Liga, one from Italy's Serie A and one from France's Ligue 1. Real Madrid CF playmaker Mesut Özil is the only other German player in the selection.
The team was chosen by users of the European governing body's official website, UEFA.com, with 209,718 voting for Lahm. Fellow Bundesliga stars Manuel Neuer, Mats Hummels, Jakub Blaszczykowski, Marco Reus, Robert Lewandowski, Mario Gomez and Klaas-Jan Huntelaar were among the nominees, but only Lahm made the final cut.
Despite failing to lift any major trophies with Bayern, the 29-year-old right-back enjoyed a remarkable 2012, captaining the Bavarians to runners-up finishes in the UEFA Champions League, Bundesliga and DFB Cup, as well as Germany to the semi-finals of EURO 2012.
The UEFA Team of the Year 2012 in full:
Iker Casillas (Real Madrid CF/ESP)
Sergio Ramos (Real Madrid CF/ESP)
Thiago Silva (Paris Saint-Germain/FRA)
Gerard Pique (FC Barcelona/ESP)
Philipp Lahm (FC Bayern Munich/GER)
Andres Iniesta (FC Barcelona/ESP)
Mesut Özil (Real Madrid CF/ESP)
Andrea Pirlo (Juventus/ITA)
Xavi Hernandez (FC Barcelona/ESP)
Cristiano Ronaldo (Real Madrid CF/ESP)
Lionel Messi (FC Barcelona/ESP)