Merkel made big decisions this year that had global impact, the magazine explained. From welcoming refugees to contributing to Greece's bailout to deploying troops to fight ISIS, Merkel took a stand on the tough issues.
"She now embodies Europe's ideals of openness and solidarity at a time when both are being severely tested," the magazine explained in a video about her award. "You can agree with her or not, but she is not taking the easy road."
Merkel is the first woman to win the award as an individual in 29 years, according to Time. Second place went to ISIS leader Abu Bakr al-Baghdadi and third place went to presidential candidate Donald Trump. Other runners-up included Caitlyn Jenner and the Black Lives Matter movement.
The award is given to someone with a profound influence on events in each year's news. Though readers can vote on who they believe should win, the winner is ultimately chosen by the magazine's editors. Presidential candidate Bernie Sanders won this year's reader poll, followed by girls' education activist Malala Yousafzai, but neither of those made the shortlist Time announced on Monday.
Last year the award was given collectively to the health care workers who fought Ebola.