Mr Khashoggi never re-emerged after entering Saudi Arabia’s consulate in Istanbul on 2 October after he went to pick up papers he needed to get married.
The Washington Post columnist was reportedly tortured, murdered and dismembered after a hit squad was sent to target him.
Time said Mr Khashoggi had “dared to disagree with his country’s government”.
It added: “He told the world the truth about its brutality toward those who would speak out. And he was murdered for it.”
The magazine also honoured Maria Ressa, who runs an online news site in the Philippines.
Time said the site, Rappler, had “chronicled the violent drug war and extrajudicial killings of President Rodrigo Duterte that have left some 12,000 people dead, according to a January estimate from Human Rights Watch”.
It added: “The Duterte government refuses to accredit a Rappler journalist to cover it, and in November charged the site with tax fraud, allegations that could send Ressa to prison for up to 10 years.”
Time chose to recognise is the Capital Gazette newspaper in Annapolis, Maryland, where five members of staff were shot and killed in June.
Their shocked colleagues showed their defiance by reporting on the murders – just hours after the shooting.
The final two people honoured by Time were Reuters reporters Kyaw Soe Oo and Wa Lone, who are currently in prison in Myanmar and “remain separated from their wives and children”.
Time added: “For documenting the deaths of 10 minority Rohingya Muslims, Kyaw Soe Oo and Wa Lone got seven years. The killers they exposed were sentenced to 10.”
Last year, women who spearheaded the #MeToo movement were named Time’s person of the year, while Donald Trump and Angela Merkel took the title in 2016 and 2015 respectively.
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