The 36-year-old actor beat competition from chart-topping British-Pakistani singer Zayn Malik, last year's winner who came in at third this year.
The 'Haider' star, who ranked seventh last year, expressed his surprise at topping the list and dedicated the stunning victory to his legion of fans who voted for him in force.
Taking to Twitter, Shahid wrote on Twitter, "Sexiest Man Alive, 2017!!! WOW!! Thank you guys!! It's all made possible because of your love & support. Love you all!!"
Actor Hrithik Roshan ranked second for the third year in a row, with Zayn Malik stooped to number three.
TV actor Vivian Dsena, and another television star Ashish Sharma came at number 4 and 5 respectively with Fawad Khan ranking at number 6.
The news was shared on social media by the magazine's Entertainment Editor, who also announced that the full list will be out in the newspapers on the December 15.
Recently, actress Priyanka Chopra also topped the list of 50 Sexiest Asian Women 2017 and this year marks her fifth time on the top spot on the list.