The 40-year-old film star has played superhero Wolverine in the "X-Men" trilogy and won a Tony Award for his work in the stage musical "The Boy From Oz." He will next be seen opposite Nicole Kidman in the big-screen epic "Australia."
Kidman said she thinks Jackman, a married father of two, is a good choice for People's highest honor.
"Women's jaws drop when Hugh walks into a room," she told the magazine. "Hugh is tough and romantic at the same time. Australian men are a different breed. They're rugged and they sweat."
Deborra-Lee Furness, Jackman's wife of 12 years, said the actor may have a "body of doom," but insists she likes "what's inside."
Asked what his wife's reaction was when she heard he had been declared People's 2008 Sexiest Man Alive, Jackman recalled: "God bless her, she said, 'I could've told them that years ago!' And then she said, 'Obviously, Brad wasn't available this year.' And I said, 'That was a joke, right?'"
Brad Pitt, George Clooney and Matt Damon are some of People's previous Sexiest Man Alive title-holders.
The magazine's 2008 list of sexy men also includes Daniel Craig, Jon Hamm, Zac Efron, Robert Buckley, Blair Underwood, Ed Westwick, Michael Phelps, Javier Bardem, Blake Shelton, Lang Lang, Robert Pattinson, Joshua Jackson and Mark-Paul Gosselaar.