The US Food and Drug Administration approved Zolgensma for children under the age of two with SMA, including those not yet showing symptoms.
The approval covers babies with the deadliest form of the inherited disease as well as those with types where debilitating symptoms may set in later.
Novartis is expecting European and Japanese approval later this year. Zolgensma will compete with Biogen's Spinraza, the first approved treatment for SMA.
The disease often leads to paralysis, breathing difficulty and death within months for babies born with the most serious Type I form.
SMA affects about one in every 10,000 live births, with 50 per cent to 70 per cent having Type I disease.
Some neurologists see gene therapy becoming the preferred treatment for newborns with severe SMA, while acknowledging that families may choose to wait for long-term safety and efficacy data for Zolgensma.
Novartis is looking into whether the death of one severely ill baby treated with Zolgensma was related to the therapy.
The FDA said it approved Zolgensma based on clinical trials involving 36 patients aged 2 weeks to 8 months.
The agency said patients treated with Zolgensma showed significant improvement in developmental motor milestones such as head control and ability to sit up.
The most common side-effects of Zolgensma are elevated liver enzymes and vomiting. The FDA is requiring Zolgensma's label to include a warning that acute serious liver injury can occur.
With additional studies underway, Novartis said it has so far treated more than 150 patients with Zolgensma, which was acquired with its $US8.7 billion purchase of AveXis last year.
Wall Street analysts have forecast sales of $US2 billion by 2022, according to a Refinitiv survey. Spinraza sales hit $US1.7 billion last year, and are seen rising to $US2.2 billion in 2022.
Roche is developing risdiplam, an oral drug, for the condition and plans to file for approval later this year.