Cameron conceived the story for it in 1995, then waited a decade for technology to catch up so he could film it.
At a press conference before the premiere Cameron spoke of his relief that the film was finished after working on the production for more than four years.
"We got the picture done on time by the skin of our teeth," the Canadian director said.
"Tonight we'll pull the cover back and show the world, so to speak. It's a huge relief to let people see it and talk about it."
He was also asked about the political stance of the film - which mentions "martyrdom" and "shock and awe" and contains one scene that echoes the events of 9/11.
"Obviously there's a connection to recent events, and there's a conscious attempt to evoke even Vietnam with the way the guys jump off the helicopters," said Cameron.
"I think there's this long wonderful history of the human race written in blood going back as far as we can remember... where we have this tendency to just take what we want without asking.
Avatar opens in the UK on 18 December
"That's how we treat the natural world as well - there's a sense of entitlement.
"We're here, we're big, we've got the guns, we've got the technology, we've got the brains. We are therefore entitled to every damn thing on this planet.
"And that's not how it works - and we're going to find out the hard way if we don't wise up and start seeking a life that's in balance with the natural world [and] the natural cycles of life on Earth."
The film mixes live action and computer animation to create a vivid, 3D alien world where humans have created avatars - hybrid creatures controlled via a mental link - to explore the planet.
'Flawed but fantastic'
The opening 15 minutes of the film were screened around the world earlier this year to help build interest in the extravagant epic.
Early reports were mixed, with some people finding the CGI sequences, featuring blue humanoid characters, off-putting.
A recent episode of US animated show South Park even went so far as to dub the film "Dances with Smurfs" - a reference to both the blue-skinned cartoon stars and Kevin Costner's western Dances with Wolves.
Although critics have seen the film, distributor 20th Century Fox has placed an embargo on reviews until 14 December.
But some publications have already published their opinions, including trade newspaper Screen International and UK movie monthly Empire.
Screen said the film was "an unprecedented marriage of technology and storytelling which is on the whole remarkably successful".
Empire called it "a flawed but fantastic tour de force" that served as "a love letter to humanity and the glory of mother nature".
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