"I am here to admit that I am HIV positive," he said.
The former star of sitcom Two And A Half Men appeared on NBC's Today show, ending days of intense media speculation.
Sheen revealed to Matt Lauer he had paid "enough to take it into the millions" to keep people from going public about his illness.
"I have to put a stop to this onslaught, this barrage of attacks and of sub-truths," he said, adding he was diagnosed four years ago.
He said when he revealed his HIV status to friends "the truth became treason", leading to "blackmail and extortion and a circle of deceit".
"I trusted them, they were in my inner circle and thought they could be helpful. My trust turned to their treason," he said, adding a prostitute took a picture of his medication and threatened to sell it to newspapers.
"I think I release myself from this prison today," he said.
He admitted that his use of drink and drugs was a "bad decision" but said it was "impossible" that he would have passed HIV on to anyone else.
The actor said he does not know how he contracted the virus but stressed he does not feel any stigma attached to the illness.
Sheen appeared with his doctor, Robert Huizenga, who said his daily medication has suppressed the virus and he is "absolutely healthy".
"Charlie has an undetectable level of the virus in his blood," he said.
When asked to respond to rumours Sheen has Aids, Dr Huizenga said: "Charlie does not have Aids - that's when the virus suppresses the immune system. He is healthy."
-BBC