So why, specifically, are you not interested in this potential new position?
Is it because you don't currently have the skills to support that or is it because you're not interested in the scope of that new role?
If it's that you don't currently have the skills - but would like to learn - I would recommend you frame your conversation with your boss around that. Tell him you are excited that he is considering you for the position but do not have X and Y and Z that is needed to be successful in that role but you are very interested in learning those skills and ask him to layout what the plan would be to bring you up to speed.
Many companies give much more leeway to internal candidates with regards to transitioning them into a new position. You may not have those exact skills but you already know the organization, may know specific systems or processes that it would take them longer to train an external candidate on.
If you truly have no interest in learning what is needed for the new position, tell your boss that it means a lot to you that he would consider you for that position but that that is not the direction you want to grow your career. Tell him what you WOULD like to do in the future (this should be an ongoing conversation in your one on ones) and ask him what you need to learn to make THAT happen.
GOOD LUCK!!!!!!!!!
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