This award is given to an event or person believed to have had the greatest impact on global events in the last 12 months.
Other finalists include protesters in Iran, Chinese leader Xi Jinping and the US Supreme Court.
The magazine’s editors said the decision was “the clearest in living memory”.
“In a world defined by division, there is unity around this, throughout this nation,” wrote Edward Felzenthal.
The magazine said Zelensky had inspired Ukrainians and won international recognition for his bravery against the Russian invasion.
“Zelensky’s success as a warlord rests on infectious courage,” he said.
British trauma expert David Knott, who traveled to Ukraine to help war wounded, was one of several to appear on the cover of the magazine.
K-pop group Blackpink was named Time’s Artist of the Year, American baseball player Aaron Judge was named Sportsman of the Year, and Malaysian actress Michelle Yeoh was named Icon of the Year.
Elon Musk, last year’s winner, was again named a finalist. In 2021, his electric car company Tesla became the world’s most expensive car maker.
The tradition started in 1927 – although he was Man of the Year at the time.