A US teacher who got her students reading an average of 40 books a year with her unique approach to literacy, which included putting a library in every classroom, has won a $1m award for teaching.

Nancie Atwell, an English and writing teacher from Maine, fought off competition from 10 global finalists – including British science teacher Richard Spencer – to become the first recipient of the prize. She said she would donate the prize to the school she founded, the Centre for Teaching and Learning in Edgecomb, Maine.

The award by the Varkey Foundation recognises outstanding contributions to the profession and the winner was announced at a ceremony in Dubai on Sunday. Former US president Bill Clinton, Paul Kagame, the president of Rwanda, and Sheikh Mohammed bin Rashid Al Maktoum, the leader of Dubai, attended the event.

The other nine finalists were a global mix, drawn from countries including Afghanistan, India, and Cambodia. The 10 finalists were themselves whittled down from a list of thousands of nominations.

Speaking at the ceremony, Clinton said: “I think the most important thing this prize has done has re-awaken the world’s appreciation of the importance of teachers.”

Atwell said she was honoured to accept the award. “I hope to convey to young people considering teaching that it’s a privilege,” she said.

Atwell established the Centre for Teaching and Learning, a not-for profit K-8 demonstration school, in 1990. It serves students but also acts as a place for teachers to come and learn. She is also the author of nine acclaimed books.

With the royalties of her first book, Atwell set up her school, which adopts an innovative approach whereby students choose what they want to write and read. Students get through dozens of books and write across all genres because of the structure of her curriculum; many of Atwell’s former students have gone on to become authors.

Spencer, a British science teacher from Middlesbrough College, Teesside, who was among the final 10, said he enjoyed every minute of the experience. “The one thing we all have in common is enthusiasm for what we do,” he said.

Spencer, who received a tweet of good luck from David Cameron, said teaching was not viewed with prestige in the UK. “[But] There’s nothing greater than moulding the next generation and helping young people succeed,” he said.

Vikas Pota, the chief executive of the Varkey Foundation, said he hoped the prize would elevate the status of teachers around the world.

Atwell hopes the award will send a positive message about the profession. “I hope this will invite creative, smart young people to consider teaching as a career, because now it’s become more difficult in the US to attract smart young people to teaching. They see it more as an act of being a technician who administers a programme, not a reflective practitioner.”