Totti retired in May to end a 25-year playing association with his boyhood club and he becomes only the second sportsman to receive the Laureus prize, following United States swimmer - and the most decorated Olympian of all-time - Michael Phelps.
The former Italy forward was also inducted into the Laureus Academy alongside fellow one-club man and ex-Manchester United favourite Ryan Giggs as part of the international charity's annual gala in Monaco.
Totti made his Roma debut as a 16 year-old and went on to represent the Giallorossi on 786 occasions, winning Serie A in 2000-01 and helping his country to glory at the 2006 World Cup.
The 41 year-old is now a director at Roma, meaning his words of encouragement for head coach Eusebio Di Francesco will come as a boost on the back of a 2-0 weekend defeat to AC Milan that left the capital club outside Serie A's top four.
"As a club we believe strongly in him," Totti told Roma's official website. "Every season has its highs and lows - at Roma especially this issue can arise when you least expect it.
"Whenever you lose it is always a delicate moment, but I don't think he is worried. We are all behind him and giving everything as we try to find our form again. He is a key person for us."