We present an exact dissipation model for correlated photon transport in waveguide QED systems. This model rigorously incorporates the infinitely many degrees of freedom of the full three-dimensional photonic scattering channels in the non-excitable ambient environment. We show that the photon leakages to the scattering channels can be accounted for by a reduced Hamiltonian and a restricted eigen-state, with a resultant atomic dissipation. This model is valid for arbitrary photonic Fock and coherent states.