Trump was chosen by Time editors for the annual honour from among world leaders, artists, corporate tycoons and path-breaking organisations as the person who had the greatest influence, for better or worse, on the events of the year.
Trump, who has appeared on various covers of Time magazine, will now be on its cover as 'Person of the Year', with the sub-headline 'President of the Divided States of America.'
However on the tagline that he will be the president of the "Divided States of America," Trump said he has not done anything to divide the country.
"I didn't divide America. We are going to put it back together. We are going to build up our military and we are going to be an economic powerhouse," he said.
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Prime Minister Narendra Modi was among the 11 candidates shortlisted by Time for its annual honour.
Modi won the online readers' poll conducted by Time magazine for Person of the Year 2016, the second time he emerged winner of the reader's choice poll.
The other runner-ups are the online hackers, who in 2016 "took aim at American democracy itself," Turkish President Recep Tayyip Erdogan who "survived a coup attempt to emerge stronger than ever", CRISPR Scientists who developed a groundbreaking new technology that can edit DNA and pop icon Beyonce who "publicly embraced explicitly feminist blackness at a politically risky moment."
Time said Trump's "next test" will be delivering upon the voters' expectations on bringing about change in the country.
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On Obama, Trump said he "really likes" the incumbent US leader and "we have a really good chemistry together. We disagree on certain policies but I really like him. I love getting his ideas."
"I have talked to him about some possible appointments. I take his recommendations very seriously," Trump said, adding that in one instance, while deciding on a Cabinet pick, he decided on an individual whom Obama "thought very highly of."
When asked about his sudden tweet about suggesting canceling Air Force One orders with Boeing, Trump said he will negotiate prices.
"We are going to the prices down. If we are not going to get the prices down, we are not going to order," he said.
"When the Pakistani government gave a long, apparently verbatim readout of its President's call with Trump, India's leaders reacted with strained nerves," it said.
Time added that it is going to be Trump's America, for better and worse.
"It's an America of renewed hope and paralyzing fear, a country few expected less than a year ago. Because of Donald John Trump, whatever happens next, it will never be like it was before," Time said in its profile of Trump.