The death of the reviled US enemy sparked jubilation across the United States, with a huge crowd gathering outside the White House just before midnight on Sunday local time, chanting "USA, USA" as Obama made a dramatic nationwide address to Americans.
"Tonight, I can report to the American people and to the world that the United States has conducted an operation that killed Osama Bin Laden, the leader of al-Qaeda, and a terrorist who's responsible for the murder of thousands of innocent men, women and children," Obama said.
We had enough intelligence to act: Obama
Obama said in the historic address from the White House that he had directed the US armed forces to launch an attack against a compound in Pakistan on Sunday, acting on a lead that first emerged last August.
'Last week I decided we had enough intelligence to act," he said.
"A small team of Americans carried out the operation with extraordinary courage and capability. No Americans were harmed. They took care to avoid civilian casualties.
"After a firefight, they killed Osama Bin Laden and took custody of his body."
"Justice has been done."
Pakistan helped US forces: Obama
President Obama said Pakistan helped the US with the operation.
Pakistani intelligence officials confirmed Bin Laden's death.
"Yes I can confirm that he was killed in a highly sensitive intelligence operation," an official told Agence France-Presse ahead of Obama's announcement.
Asked whether Pakistani intelligence participated in the operation he said only: "It was a highly sensitive intelligence operation."
Hunt for Bin Laden lasted years
US armed forces have been hunting the Saudi terror kingpin for years, an effort that was redoubled following the attacks by hijacked airliners on the World Trade Center in New York and the Pentagon which killed 3000 people in 2001.
But Bin Laden always managed to evade US armed forces and a massive manhunt, and was most often thought to be hiding out in Pakistan and Afghanistan border areas.
Bin Laden was top of America's most wanted list, and was blamed by Washington for masterminding a string of other attacks, including the attacks on US embassies in Kenya and Africa in 1998.
Crowd celebrates outside White House
Chants of "USA, USA" rang out from a huge and quickly building crowd outside the White House as the news of Bin Laden's death sent a electric charge through Washington. People cheered waved the US flag and sang the US national anthem.
Despite the decade that has elapsed since the September 11 attacks, the event, one of the most traumatic in US history, still stirs raw emotions, and his demise will be celebrated across the United States.
Question about al-Qaeda's future
The death of Bin Laden will raise huge questions about the future shape of al-Qaeda and also have steep implications for US security and foreign policy 10 years into a global anti-terror campaign.
It will also provoke fears that the United States and its allies will face retaliation from supporters of bin Laden and other Islamic extremist groups.
Travel alert for US citizens
The US State Department on Sunday issued a global travel alert to all US citizens, saying there could be an outbreak of anti-American violence.
Meanwhile, the US dollar rose against the euro and the yen when it emerged that Obama would announce the death of the al-Qaeda leader, nearly 10 years after the September 11 attacks.
The US dollar rose against the euro, which fetched $US1.4764 from $US1.4864 in earlier trade.
The dollar was at 81.66 yen from 81.19 earlier.