The property tycoon was awarded the title following his unexpected victory over Hillary Clinton in November's presidential election, the BBC reported.
Mr. Trump told NBC's Today show shortly after the announcement it was a "great honor" which "meant a lot" to him.
He was chosen from a shortlist that included Mrs. Clinton and Russian President Vladimir Putin.
Read alsoPutin says Trump clever, will understand new responsibilities – mediaThe former leader of the UK Independence Party, Nigel Farage, was also on the list for his role in the successful campaign for Britain to leave the European Union.
Mrs. Clinton came second in the selection, Time's managing editor Nancy Gibbs said, adding that the choice of Mr. Trump was "straightforward."
Time said the president-elect had redrawn America's political rules.
The magazine invites readers to vote on who they think has earned the title, but the final decision is made by editors.
Others considered included gold-medal winning U.S. gymnast Simone Biles, singer Beyonce Knowles and Facebook CEO Mark Zuckerberg.