In the 1950s it was declared biologically dead – a heavily polluted river that was a far cry from the days when it was admired by William Wordsworth, Claude Monet and the Three Men in a Boat of Jerome K Jerome's book. Now the Thames and its tributaries teem with 125 fish species including salmon, trout, sole and bass.

The resurgence was rewarded yesterday when the river was given a top global conservation prize for its dramatic recovery.

The International Thiess river prize is awarded annually in Australia and comes with prize money of A$350,000 (£218,000).

That the Thames triumphed over competition from the mighty Amazon and idyllic rural waterways such as the Piddle in Dorset, can be explained by the prize's focus on restored and well-managed rivers. "The Thames has 13 million people living along it and it's still got quite a bit of industry," said a spokesman for the Environment Agency, which manages the river. "The Piddle and the Amazon don't have those environmental pressures – the sewage, the industry."

The agency plans to spend the prize on further restoration work and a project to twin the Thames with a river in the developing world which needs restoration.

Having initially been selected from more than 100 entries, the Thames beat three other finalists including the Yellow river in China, which has huge pollution and overuse problems – so much so it sometimes does not reach the ocean.

The agency pointed out that 80% of the Thames is now judged to have "very good" or "good" water quality.

In the last five years there have been nearly 400 habitat enhancement projects and more than 40 miles of river has been restored or enhanced, often transforming concrete urban channels back into quasi-natural meanders.

"In the last 150 years the Thames has been to hell and back," said Alistair Driver, the EA's national conservation manager.

Even the agency admits, though, that there is much more work to do before everyone agrees with the judges at the International River Foundation, especially on the Thames's many urban and suburban tributaries – some of which still flow spasmodically through concrete pipes or over shopping trolleys and other modern jetsam.

David Suchet, the actor and boater, sent a message of support, saying: "I am fortunate in my life to have travelled extensively and enjoyed many other rivers worldwide. But the river Thames is priceless and one of the most glittering jewels in the crown of our English heritage."

The other two finalists were a scheme to restore the drought-ravaged Hattah lakes in Australia and protection and restoration work by the Smirnykh rivers partnership in Russia. Previous winners include the Danube, currently swamped by a toxic chemical spill, and the Mersey in Liverpool – the prize's first winner in 1999.