The track, which features Justin Bieber on its remixed version, has had over 4.6 billion plays since it was released in January.
‘Despacito’, which means ‘slowly’ in Spanish, has knocked Bieber’s song ‘Sorry’ off the top spot.
That track, featured on his 2015 album Purpose, has combined streams of 4.38 billion on platforms such as Spotify and Apple Music.
Chairman & CEO of Universal Music Group, Sir Lucian Grainge, said: ‘Streaming has opened up the possibility of a song with a different beat, from a different culture and in a different language to become a juggernaut of success around the world.
‘Luis Fonsi already had the undisputed, biggest song of the year – and now he’s setting even bigger records.’
‘Despacito’ has been number one in the Billboard Hot 100 chart for the past ten weeks and the video currently has 2.65 billion views on YouTube.
It’s topped the chart in 45 different countries including the UK.