There is no prefect, non awkward way of doing this. I think we are all going to have to accept that unrequited love will always be painful. And delivering the news that a love is unrequited is always going to be awkward. I think "I don't feel the same way, I'm sorry" or similar clear but gentle rejection is the best we can do. You will both survive the awkwardness. The first time someone confessed feelings for me I also panicked, by the way x) It was ages ago, I barely remember the conversation, and honestly I doubt he does either. So, take heart that even when it does get weird, it's perfectly survivable.
There is also the option of being very open with being aromantic, and not interested in the whole dating-romance thing. I'm not really a person who specifically 'come out' but the topic of relationships come up with enough regularity that I have had the option of bringing it up naturally with most people I am close to. So most people know i am not actually available. It doesn't mean no one will ever develop feelings for you, and some people might still think asking is worth a shot, but having a baseline of "this person is probably not interested in anything" will at least set some expectations.