"The massive increases in the numbers of people receiving treatment in South Africa between 2009 and 2010, are likely to be reflected in substantially fewer new infections in the near future," according to the report.
If South Africa continues to increase its AIDS investments with domestic and international support, it could halve the number of people infected with HIV each year, bringing this to less than 250 000.
In South Africa and 21 other sub-Saharan countries, the HIV incidence (the annual rate of new infections) has declined by more than a quarter between 2001 and 2009.
However, South Africa remains the country with the greatest number of people living with HIV - an estimated 5.6 million.
AIDS has claimed at least one million lives annually in sub-Saharan Africa since 1998. Almost half the AIDS-related deaths in the world in 2010 occurred in southern Africa.
However, AIDS-related deaths have steadily decreased, as free antiretroviral therapy has become more widely available in the region.
The total number of new HIV infections in sub-Saharan Africa has dropped by more than 26%, down to 1.9 million from the estimated 2.6 million in 1997.
The epidemics in Botswana, Namibia and Zambia appear to be declining. The epidemics in Lesotho, Mozambique and Swaziland seem to be levelling off, albeit at unacceptably high levels.
In addition, the increase in access to treatment is speeding up the decline in new HIV infections. Modelling suggests that the number of new HIV infections is up to 50% lower now than it would have been in the absence of ARV treatment.
But a big factor limiting the impact of treatment on the epidemic is the fact that about 60% of people living with HIV are unaware of their HIV status.
"Introducing community-based approaches to testing may help to increase accessibility and uptake, and therefore, increase levels of knowledge of HIV status," according to UNAIDS.