The swimmers were named in the December issue of the magazine, which is published on Thursday and featured Thorpe on the cover.
It is the second time in a row and fourth time in the last five years that the 20-year-old Thorpe has earned the prestigious award, making him the first swimmer to win the award four times.
Three swimmers -- Janet Evans from the U.S., Hungary's Kristina Egerszegi and East Germany's Kristin Otto -- were three-time winners.
It is the first time Coughlin, also 20, has received the award.
The two were selected by a panel of 12 international swimming writers.
17 year-old American Michael Phelps, who had more impressive world rankings than Thorpe, finished second.
The "Thorpedo" set one world record in 2002, lowering his own mark in the 400m freestyle to 3:40.08, and was ranked first in the world in the 200 and 400 metres freestyle.
But in the year's two biggest meets -- the Commonwealth Games in Manchester, England and the Pan Pacific Championships in Yokohama, Japan -- he won an astonishing 11 gold medals, with six individual and five relay.
Phelps set a world record in the 400 metres individual medley (4:11.09) and ranked first in the 200 and 400m medleys and second in the 200m butterfly, another event in which he holds the world record.
He also swam on the USA's world record-setting 4x100m medley relay.
Coughlin was a nearly unanimous choice over Germany's Franziska van Almsick.
The University of California student became the first woman to break the one-minute barrier for the 100m backstroke (59.58).
She ranked first in the world in three different strokes -- the 100m freestyle, 100m backstroke and 100m butterfly -- and won four individual gold medals plus a relay gold and two silver medals at the Pan Pacifics.
Last month she set short course world records in the 100m backstroke, 100m butterfly and 100m individual medley.
The Amphibian - A profile of ace swimmer, Ian Thorpe