First things first: kudos on your desire to do what's right, even though it's the hard choice. By doing so you are putting his needs above your own and showing by your actions that you love him, if not romantically, at least as a friend. Remember that when you are feeling guilty for breaking up with him--you're making a difficult but honorable decision.
I've been exactly where you are and it sucks. I wasn't as brave as you, though--instead of calling it off as soon as I knew it wasn't working, I let it go on several more months and made the inevitable breakup that much worse. So, again, good on you for making the tough but appropriate choice.
To answer your question, no, unfortunately, there is no painless way to break up with someone. Like family reunions and watching videos of other people's kids, ending relationships is one of those crappy things we have to do in life that never gets easier. No matter how you do it, he's going to be hurt. There's nothing you can do about that. Rejection always stings, and we all must experience it.
What you can do, however, is to be as gentle and as honest with him as you can. Tell him what you told us--he's a great guy and you think the world of him, but you simply don't have romantic feelings for him. Don't make excuses ("It's not you, it's me") or promises ("Who knows, maybe I'll change my mind"). Just be straight. The truth hurts, but someday he will appreciate the fact that you were not willing to string him along.
I know you would probably like to be friends with this guy after the breakup, but I think it's best to leave that to him. Avoid the dreaded "I still want to be friends" speech --guys hate that. Just give him time and space to lick his wounds and see what happens. Don't push a friendship on him just to soothe your guilt. It might ultimately be too hard for him to be friends; he might need a clean break. Let him decide.
Good luck with this. I know it's a drag but you are doing the right thing and should feel good about that. You aren't purposely hurting his feelings, so go easy on the guilt.
Thanks for the question.