Becomes first video to achieve feat on Google's video sharing platform, which has generated upwards of $8-9 million in earnings for Psy.
Psy's Gangnam Style music video has become the first video in history to surpass one billion views on YouTube.
Last month, Gangnam Style surpassed Justin Bieber's Baby video to become the most popular YouTube video ever. The pop star's video, which had 805 million views at the time that has since increased to 813 million, was beaten in five months.
Gangnam Style has also earned a Guinness World Records title as the most-liked video in YouTube history thanks to over two million users giving a digital thumbs up. It's generated more than 4.2 million comments.
Last month, marketing blog Wordstream said the video was being viewed 4,000 times each minute, subsequently suggesting that it would reach the coveted 1 billion views milestone by December 11. Still, it's not too bad of a feat if it achieved it 10 days later on the (non-existent) apocalypse day.
YouTube owner Google said the video has been watched seven million to 10 million times a day on average. "Psy's success is a great testament to the universal appeal of catchy music - and er, great equine dance moves," said Kevin Allocca, YouTube trends manager.
"I've seen a statistic which reckons the one song will have generated something like $8m [£5m] by the end of the year from money that comes directly from YouTube through advertising plus download sales, its uses in adverts and TV programmes," Chris Cooke, business editor of the CMU music news site, told the BBC. "It shows that YouTube - which is a free-to-use as a promotional platform for the music labels - can lead to substantial income.
"Should every artist be trying to think of a funny video that will go viral and be mimicked? I don't know whether it's a template that can be copied, but it certainly shows how quickly an eye-catching clip can spread thanks to social networks and YouTube."
"Another great example of Theodore Levitt's 'globalisation' and the power of K-pop," said Martin Sorrell, chief executive of advertising giant WPP. "The thing that interests you in the video is the fact that you don't understand the lyrics," added Scott Mills, a BBC Radio 1 DJ. "The first time I saw it was on The Ellen DeGeneres Show in America and I just thought it was a bit of fun, but I didn't expect it to be as big as it was."
"Psy came into my Radio 1 show and The Guinness World Records presented him with a plaque for the most 'liked' YouTube video of all time and the amazing thing is he is just a guy, he hasn't tried to do any of this."
South Korean hair stylist D C Han, who worked in Gangnam before starting a business in London, said he was proud to see the song become a global hit. "I was amazed. K-Pop is getting stronger and stronger, everywhere in Asia they are listening to it - China, Hong Kong, Taiwan. Maybe even in Japan but they might not admit it."