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Originally called the Grammy Award for Best Southern Gospel Album, Bruce Carroll first won the award at the 33rd Grammy Awards in 1991 for the album The Great Exchange.
Three years later, the category's name was changed to the Best Southern Gospel, Country Gospel or Bluegrass Gospel Album, a name it held until 1998 when it became the Best Southern, Country or Bluegrass Gospel Album.
Following the 2011 awards, the category merged with the Grammy Award for Best Rock Gospel Album and the Grammy Award for Best Pop / Contemporary Gospel Album, forming the Grammy Award for Best Contemporary Christian Music Album, in order to " tighten the number of categories " at the Grammy Awards, according to the NARAS.

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