Dexamethasone proves to be first life-saving drug against CoronaVirus
Had the drug had been used to treat patients in the UK from the start of the pandemic, up to 5,000 lives could have been saved, researchers say.
The UK government has 200,000 courses of the drug in its stockpile and says the NHS will make dexamethasone available to patients.
And it appears to help stop some of the damage that can happen when the body's immune system goes into overdrive as it tries to fight off coronavirus.
In the trial, led by a team from Oxford University, about 2,000 hospital patients were given dexamethasone and compared with more than 4,000 who were not.
Chief investigator Prof Peter Horby said: "This is the only drug so far that has been shown to reduce mortality - and it reduces it significantly. It's a major breakthrough."
The Recovery Trial, running since March, also looked at the malaria drug hydroxychloroquine, which has subsequently been ditched amid concerns it increases fatalities and heart problems.
