Jutanugarn also claimed the Rolex Player of the Year award.
It wasn't the only trophy to slip out of Ko's hands.
She was also denied the Vare Trophy, awarded for the lowest scoring average during the season, after In Gee Chun rolled in a 10-footer on the final hole for a birdie that served as the final margin in the yearlong scoring standings.
Combined, Ko and Chun took more than 11,500 swings over 166 rounds - and the scoring title came down to one putt.
"I didn't know," said Chun, who needed to end her year with three consecutive birdies to pass Ko in the scoring race.
To her credit, Ko was all smiles after a tough day.
"I tried to fight it out until the end," said Ko, the world's No. 1 player, who wrapped Jutanugarn in a big hug when their rounds were complete before heading off to sign dozens of autographs.
After dropping three shots on the front nine, Ko made three straight birdies to start the back nine to keep in touch with Jutanugarn. Another birdie at the 16th hole saw her go level with Jutanugarn before Ko dropped another shot at the 17th ending any hope of the $1m and the player of the year gong.
Despite missing out on all the big awards for the year, Ko still had another impressive season in what was her third full year on the LPGA Tour.
She took home more than $2,457,913 in prize money with four victories, including her second major with a one stroke win at the ANA Inspiration in April. Ko finished in the top three in the first three majors of the year and also won New Zealand's first ever Olympic medal in golf, with a silver at the Rio Games.
However Ko has struggled to find her best form since the Olympics, having failed to win a tournament since July at the Marathon Classic.
She is also on the hunt for a new caddie after parting ways with Jason Hamilton last month.
