The developers - Pfizer and BioNTech - described it as a "great day for science and humanity".
Their vaccine has been tested on 43,500 people in six countries and no safety concerns have been raised.
The companies plan to apply for emergency approval to use the vaccine by the end of the month.
No vaccine has gone from the drawing board to being proven highly effective in such a short period of time.
There are still huge challenges ahead, but the announcement has been warmly welcomed with scientists describing themselves smiling "ear to ear" and some suggesting life could be back to normal by spring.
"I am probably the first guy to say that, but I will say that with some confidence," said Sir John Bell, regius professor of medicine at Oxford University.