The photo was taken in the very last days of Lennon's life, before he shot dead outside the Dakota building in New York in December 1980. It was published by Rolling Stone in January 1981 as a tribute to the former Beatle.
The iconic image was ranked the best cover of the last 40 years by a panel of magazine editors and art directors at the American Society of Magazine Editors in New York last night.
The Lennon and Yoko cover beat competition from Vanity Fair, featuring the now much-aped heavily pregnant Demi Moore picture from August 1991, which was also shot by Leibovitz.
Others on the list were, in third place, an April 1968 cover of Esquire of Muhammad Ali in a St Sebastian pose with arrows in his body, while a Saul Steinberg drawing for The New Yorker of New York's West Side dwarfing the rest of the country in 1976, came in fourth. In fifth was another Esquire cover from the 60s, this time the May 1969 picture of Andy Warhol in a can of tomato soup.
Mark Whitaker, editor of Newsweek and ASME president, said: "Both the choice of a cover and the execution of a cover are crucial for any magazine. Every editor wants their cover to stand out."
Other covers on the list included The New Yorker from September 2001, two weeks after the 9/11 attacks, with silhouettes of the World Trade Centre on a black background and the much written about and recently revisited National Geographic June 1985 cover of a haunted-looked Afghan refugee girl.
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