The University has picked up a coveted title at the Times Higher Education Awards 2013.
It triumphed in the Outstanding Employer Engagement Initiative category and received the award at a ceremony in London.
The event was attended by more than 1,000 staff from universities and colleges across the UK.
Edinburgh won the award for its Making the Most of Masters (MMM) taught postgraduate programme.
The project aims to improve collaboration between employers and universities by providing opportunities for masters students to undertake work-based projects.
It is supportedby the Scottish Funding Council and is a partnership between the Universities of Edinburgh, Aberdeen and Stirling.
The award category was for innovative projects that encourage collaborative working between universities and employers.
Judges were keen to see evidence of high quality, flexible provision that meets employer and employee needs.
The judges noted that Edinburgh met these criteria while also being well received by the people it sought to benefit.
The course enables students to demonstrate their employability by undertaking a project proposed by the employer with the help of a specially designed toolkit.
Projects are proposed by employers and negotiated with the representatives of the relevant master's programmes.
The MMM toolkit helps students to engage with industry partners.
Dedicated members of staff help the master's courses and employers to work together in adapting resources to specific needs.
In 2011-12, MMM engaged with 281 employers and 67 master's programmes, and a total of 244 projects were agreed, 110 of which were taken by students.
A further 335 projects have been added in 2012-13.
Making the Most of Masters is an innovative taught postgraduate programme in which students can undertake work with an employer in lieu of a traditional dissertation.