The People's Daily website published two paragraphs lifted word-for-word from The Onion, along with a photo gallery of 55 images of Mr Kim, who took over as the North's leader after his father Kim Jong-il died last December.
The newspaper, known for keeping to the Communist Party line, described the organisation awarding the title as "US website The Onion", but made no mention of satire and published the report in both English and Chinese as world news.
"With his devastatingly handsome, round face, his boyish charm, and his strong, sturdy frame, this Pyongyang-bred heartthrob is every woman's dream come true," The Onion said in its original report, quoted by the People's Daily.
"Blessed with an air of power that masks an unmistakable cute, cuddly side, Kim made this newspaper's editorial board swoon with his impeccable fashion sense, chic short hairstyle, and, of course, that famous smile."
China is North Korea's sole major ally and economic lifeline, providing it major food and fuel aid.
Pyongyang's reliance on Beijing has increased as international sanctions over its missile and nuclear programs have strangled its ability to secure international credit and foreign trade.
The People's Daily cited The Onion's supposed style and entertainment editor "Marissa Blake-Zweiber" as saying of Mr Kim: "He has that rare ability to somehow be completely adorable and completely macho at the same time."
The Onion's editor, Will Tracy, says having a spoof mistaken for the truth is a rare pleasure.
"We certainly tried as hard as we could to ape the language of People magazine, or kind of tabloid sexiest man alive awards," he said.
"I wouldn't say I'm surprised. I mean this kind of thing has happened in different forms before. So it never totally takes us by surprise, although it's a total delight whenever it does happen."