Jane Austen's Pride and Prejudice, in second place, was the only non-fantasy book among Britons' five favourite works.
His Dark Materials trilogy, by Philip Pullman won third spot ahead of Douglas Adams' The Hitchhiker's Guide to the Galaxy which just pushed Harry Potter and the Goblet of Fire - the fourth instalment of the boy wizard adventures - into fifth place.
The Lord of the Rings trilogy has enjoyed renewed popularity, following its successful switch to the cinema screen.
The winning text was announced late on Saturday in a ceremony at the Royal Opera House in central London, broadcast live on BBC television and attended by Simon Tolkien, grandson of JRR Tolkien.
"I think it's an unbelievable honour to be here today and for my grandfather to be so loved in this way," Simon Tolkien said following the award.
Novels falling just short of the top five included Harper Lee's To Kill A Mockingbird, AA Milne's Winnie The Pooh and George Orwell's Nineteen Eighty-Four.
The search for Britain's favourite novel began in April when nearly 1,400,000 people voted in the BBC's The Big Read poll to find the nation's top 100 fictional works.
The list was eventually whittled down to five after which about 750,000 people voted to select the winner.
The Lord of the Rings won 174,000 votes in the final poll, 39,000 in advance of its nearest rival Pride and Prejudice and over 100,000 more than the fourth instalment of Harry Potter.