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.
How effective could it be?
A vaccine - alongside better treatments - is seen as the best way of getting out of the restrictions that have been imposed on all our lives.
The data shows that two doses, three weeks apart, are needed. The trials - in US, Germany, Brazil, Argentina, South Africa and Turkey - show 90% protection is achieved seven days after the second dose.
However, the data presented is not the final analysis as it is based on only the first 94 volunteers to develop Covid so the precise effectiveness of the vaccine may change when the full results are analysed.
Dr Albert Bourla, the chairman of Pfizer, said: "We are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis."
Prof Ugur Sahin, one of the founders of BioNTech, described the results as a "milestone".