South Korean singer Psy performs his hit "Gangnam Style" during a morning television appearance in central Sydney October 17, 2012. [Photo/Agencies]

South Korean rapper Psy's quirky viral hit "Gangnam Style" took the prize for top song on Wednesday at the 27th annual Golden Disk Awards, a Korean pop event dubbed the "Korean Grammys".

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The two-day celebration of all things K-pop, including performances by superstars such as the boy band Super Junior, was held in the Malaysian capital of Kuala Lumpur before hordes of screaming fans, a testimony to the soaring popularity of Korean pop music around the world.

Nowhere has that been more apparent than with "Gangnam Style," an infectious hit that made history last month when it became the first ever video on YouTube to reach 1 billion views, the latest record on the song's surge into mainstream pop.

The tune won the Song of the Year award, the final prize.

The awards were only the latest accolades for Psy, 35, in what has been a whirlwind year for the chubby rapper, the first K-pop artist to achieve mainstream success in the United States as a result of "Gangnam Style".

Decked out in a bow tie and suit jackets varying from pink to baby blue, and only a towel for one sequence set in a sauna, Psy raps in Korean and busts funky moves based on horse-riding in venues ranging from playgrounds to subways.

The song, released in July, was meant as a commentary on the rampant materialism of today's South Korea - particularly in relation to the Gangnam section of the city, which Psy has termed Seoul's Beverly Hills.