The prize was awarded at the Closing Night Ceremony on Sunday, October 14.
The film was praised for “its creative audacity, exceptional skill and deeply human approach that captures a moving truth about our fracturing world".
Totaro was a guest of the festival and took part in Q&As throughout, supported by the Italian Institute of Culture.
He was delighted with the reception of his film.
"It's my first international award,” Totaro said.
“I'll never forget it and these amazing days at Antenna!
“I’m looking forward to coming back with my next [film].”
Happy Winter depicts Italian beach culture, set amidst the economic crisis on Palermo’s most touristic coastline, Mondello Beach.
The characters’ stories are developed with a deep sense of empathy.
At the closing ceremony, a special mention went to América, by Erick Stoll and Chase Whiteside, in the category of Best International Documentary.
Meanwhile, Australian documentary Undermined: Tales from the Kimberley was the audience favourite.