The 43-year-old was attending the launch of a book based on the diaries of another famous Welshman, Richard Burton, at the New York Public Library for the Performing Arts when he was presented with the unexpected honour, reported Daily Star online.
Swansea University Vice Chancellor Professor Richard B Davies handed the award to the "Frost/Nixon" star and Sheen said that he was overwhelmed to have been recognised by the local institution.
"I'm thrilled to receive this honorary degree, particularly as it comes from Swansea, the city that I grew up closest to and where I had some of the happiest times of my youth.
"I am so proud to still be involved with so many groups and organisations in the area and so to be honoured by Swansea University in this way is especially meaningful for me," Sheen said.
The award is conferred on individuals in recognition of outstanding achievement and contribution to the university or region, read a statement from Davies, posted on the university's website.
"Michael Sheen has achieved extraordinary success internationally. But he has never forgotten his roots and has found many ways to give something back to our part of the world. We are, therefore, delighted to honour him with this award," Davies said in the statement.
