Vonn, who retired as the greatest female skier in history earlier this month, was awarded the accolade at the 2019 Laureus World Sports Awards in Monaco for her success and dedication to her sport.
Injuries had blighted the latter stages of her career but Vonn managed to bow out in impressive fashion earlier this month at the World Championships in Are.
By winning downhill bronze in her final race, she became the oldest woman to secure a medal at a world championships and the first female racer to medal at six world championships.
She finished her career with 82 World Cup victories to sit second on the all-time list behind Sweden's Ingemar Stenmark.
Djokovic & Biles
The "Oscars of Sport" honor the greatest and most inspirational athletes from the last calendar year.
On a glamorous night in Monaco, Djokovic was announced as the World Sportsman of the Year -- fending off competition from World Cup star Kylian Mbappe and marathon man Eliud Kipchoge.
The Serbian tennis ace won Wimbledon and the US Open last year and has now joined Olympic legend Usain Bolt as a four-time winner of the Laureus accolade.
"Last year was an incredible season for me, returning from injury to win Wimbledon and the US Open is something I'll remember forever," Djokovic said after receiving his award.
Despite being overlooked for the Sportsman of the Year award, Kipchoge was handed the Exceptional Achievement Award for his record breaking marathon success.
Meanwhile, US gymnast Biles was named World Sportswoman of the Year after her record breaking performance at the world championships last year.
The 21-year-old, winner of the same Laureus award in 2017, won four gold, one silver and one bronze medal in Doha, Qatar.
Elsewhere, France became the first national football team to win a second Laureus World Team of the Year Award, following on from its success at the 2018 World Cup in Russia
Tennis star Naomi Osaka went home with the World Breakthrough of the Year Award, while golf legend Tiger Woods won the World Comeback of the Year Award.
Former Arsenal manager Arsene Wenger received the Laureus Lifetime Achievement Award for his contribution to football. The Frenchman managed the Gunners for 22 years, famously going an entire English Premier League season unbeaten.
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