The 26-year-old quadruple world champion saw off the challenge of basketball star LeBron James, tennis player Rafael Nadal, Real Madrid footballer Cristiano Ronaldo and athletes Usain Bolt and Mo Farah to scoop the prestigious prize.
Vettel, who had been nominated four times previously without winning, said the award was “one of the most special I have received.”
The German racer is the latest in a long line of Formula One drivers to have been honoured by Laureus. Seven-time world champion Michael Schumacher was named world sportsman of the year in both 2002 and 2004, whilst Juan Pablo Montoya, Lewis Hamilton and Jenson Button are all previous recipients of the Laureus ‘Breakthrough of the Year’ prize, winning in 2002, 2008 and 2010 respectively.
But whilst Vettel claimed individual honours, Red Bull lost out to European football champions Bayern Munich in the 2014 Team of the Year category, an award previously won by Renault (in 2006) and Brawn GP (in 2010).