I am about to be offered a very large promotion, but it would require me to relocate which I don't want to do. I will hear out the offer, but am almost sure I will end up turning it down. When doing so, I want to make sure that the rejection doesn't come across badly, letting my company/manager know:

1. how much I appreciate the offer, and the faith and confidence in me behind it;
2. that I fully understand the fantastic opportunity being placed before me;
3. that I greatly value both his friendship and his leadership;
4. that I'd leap at the chance to work with him if circumstances were different; and
5. how difficult a decision this is to make.

How can I turn down a promotion gracefully causing minimal risk to my career or resentment by management?