Titled ''Chic in Merino'', the Wanaka designer's creamy-white felted and stitched merino wool and silk vest, mini-kilt and short top, with bag, hat and shoes won the felted category at the show, and took the Otago Daily Times supreme award.
Her entry was one of 57 spread over eight categories, with the winner of each category eligible for the supreme award.
About 385 people dressed in their best filled the Dunstan High School gymnasium, transformed with a runway, carpeting and lighting hung from the roof for the show.
A fashion show had been held the evening before, as well, attracting 300 people.
Garments in the competition, which has been a Blossom Festival fixture for 11 years, were required to be at least 75% wool.
Mrs Kerr (73) said she could ''hardly believe'' she had won.
''I have entered for four years now and enjoyed it each time.
''It's a wonderful forum for those of us who do it as a hobby because we have a passion for it.''
Mrs Kerr thanked the ''beautiful'' models, and requested everyone who entered to do so again.
''I think I will,'' she said.
Her design took about a month working on-and-off to put together.
Charlotte Chambers won the streetwear section with her entry ''Chequered Textures''.
Knitwear was won by Daphne Randle with ''Tyla'', and avant-garde by Simone Montgomery with her design ''Lady Marama Hollingberry-Twitter Steampunk Professional''.
Kimberley Ramsay won the young designer category with ''Home Comfort'', and Becs Calder took the special occasion category with ''Chain Reaction''.
The accessory category was won by Gillian Shaw's ''Melbourne Cup Raceday'', and the menswear section by Laurel Judd's ''Lounge Lizard''.
Festival organiser Martin McPherson said feedback on the show was amazing.
''I'm really proud to be associated with that. From the very beginning - with the Dunstan High School team that helped set up to this afternoon - we walked out of the gymnasium and you would not know we were in there.''
The show was the final event for the 2014 Blossom Festival.
