A small team of Americans carried out the attack and took custody of bin Laden's remains, the president said, in a dramatic late-night statement at the White House.
A jubilant crowd gathered outside the White House as word spread of bin Laden's death after a global manhunt that lasted nearly a decade.
"Justice has been done," the president said.
The development comes just months before the tenth anniversary of the September 11 attacks on the World Trade Center towers in New York and The Pentagon in Washington, orchestrated by bin Laden's al-Qaida organisation, that killed more than 3,000 people.
The attacks set off a chain of events that led the United States into wars in Afghanistan, and then Iraq, and America's entire intelligence apparatus was overhauled to counter the threat of more terror attacks at home.
Al-Qaida organisation was also blamed for the 1998 bombings of two US embassies in Africa that killed 231 people and the 2000 attack on the USS Cole that killed 17 American sailors in Yemen, as well as countless other plots, some successful and some foiled.