The winner, Ari Hodara, a 59-year-old software engineer from Paris, was selected at random at Christie's auction house in Paris from 120,000 tickets sold at 100 euros ($A165) apiece.
The raffle's proceeds will fund Alzheimer's disease research.
"I was surprised, that's it," Hodara said during a phone call with organisers shortly after the draw.
"When you bet on this, you don't expect to win."
Launched in 2013, the "1 Picasso for 100 euros" raffle aims to support charities by giving participants a chance to win an original work by the famed Spanish artist.
This was the third edition.
This year's prize was Tête de Femme (Head of a Woman), a gouache-on-paper portrait painted by Pablo Picasso in 1941, estimated to be worth a million euros.
Rendered in his signature style, the grey, white and cream composition reflects the sombre mood of the era while also suggesting hope, Picasso's grandson Olivier Widmaier Picasso has said.
For the first time in the raffle's history, all 120,000 tickets were sold, organisers said.
One million euros from the sales will go to international gallery chain Opera Gallery, the painting's current owner, they said.
The remaining proceeds of approximately 11 million euros will be donated to France's Fondation Recherche Alzheimer, a leading funder of research into the neurodegenerative disease.
The raffle's first edition in 2013 raised 4.8 million euros and awarded Picasso's The Man in the Opera Hat to then 25-year-old US citizen Jeffrey Gonano.
Proceeds went to the preservation of the Lebanese city of Tyre, a UNESCO World Heritage Site.
For the second edition, in 2020, an Italian woman won Picasso's still life Nature Morte with a ticket she had received as a Christmas gift from her son.
Proceeds were donated to sanitation projects in schools and villages in Cameroon, Madagascar and Morocco.
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