The studio said that the James Cameron film surpassed Titanic's $1.843-billion record Monday to become the highest grossing film of all time.
According to cinema tracking site boxofficemojo.com Avatar had earned $1.859 billion through Monday night.
However, adjusted for inflation Gone With the Wind remains the top movie of all time.
The milestone cements the place of Cameron, who produced, directed and wrote both Titanic and Avatar as the most successful moviemaker of all time.
With the movie still going strong in cinemas worldwide, industry observers say it is likely to smash Titanic's record.
"It ain't over yet, " said Paul Dergarabedian, the box office analyst of Hollywood.com. "This film could do $2 billion, something unthinkable."
Though Titanic holds the box office record and shares a record 11 Oscar wins, Avatar looks unlikely to challenge the Oscar milestone. The movie, which uses cutting edge 3-D technology, has notched awards for for best drama and best director at the Golden Globe awards.
But it has performed poorly at other awards ceremonies most notably at the Screen Actors Guild and Producers Guild awards this weekend, where it was shut out of major honours by voting members who form a key constituency in Oscar voting.
Top 5 grossing films of all time:
1. Avatar - $1.859 billion
2. Titanic - $1.843 billion
3. Lord of the Rings: The Return of the King - $1.119 billion
4. Pirates of the Caribbean: Dead Man's Chest - $1.066 billion
5. The Dark Knight - $1.002 billion