The 37-year-old actor is featured on the cover of People's annual issue, on newsstands Friday. Damon, who is married to Luciana Bozan, said the honor came as a surprise.
"You gave an aging suburban dad the ego boost of a lifetime," he says in a letter published in the magazine. "My 9-year-old stepdaughter now thinks I'm cool - well, cooler."
Damon, who has a 1-year-old daughter, Isabella, with Bozan, says "all the campaigning" by Clooney and Pitt had finally paid off.
"Unfortunately, after all those years out on the trail, the meet and greets, the fundraisers, the stump speeches, I've finally come to terms with the fact that this is a mantle I wasn't meant to hold," he says in the letter, which was signed "Matty."
"Don't get me wrong, though. I was really shocked and happy (Lucy said I actually blushed) when I heard the news. So I can't thank you enough for that."
People's "sexiest man alive" list began in 1985 with Mel Gibson. Others on the list: Clooney (1997 and 2006), Pitt (1995 and 2000), Denzel Washington (1996) and Johnny Depp (2003).
Damon won a screenwriting Oscar with Ben Affleck in 1998 for "Good Will Hunting." Both Damon and Affleck starred in the movie.
He has also starred in "The Departed," "Syriana," the "Ocean's" franchise with Clooney and Pitt, and "The Bourne Identity" and its two sequels.
Scientists unveiled a few curious details about the skeletal remains from the black sarcophagus that was found in Alexandria, Egypt