Huge aid increases are needed to help more than 210 million children around the world working full-time, the United Nations' children's fund Unicef says.
Unicef says 60% of all child workers in the world are in Asia
Many children aged five to 15 are working as slaves, miners, prostitutes and soldiers, its latest report says.
Unicef argues the only way to end child labour is to end poverty and it calls on rich industrialised nations to give far more in development aid.
Child labour, it says, is a scar on the world's conscience in the 21st Century.
Children are born, sold and trafficked into what amounts to domestic slavery in many countries, the report says, some earning as little as $1 a month.
Others are exploited in unregulated chemical plants in Asia, giant open cast mines in Latin America and stone quarries in West Africa.
Children are also used as cheap farm labour in North America and sex workers in Europe, the report said, citing prostitutes as young as 15 in UK cities.
CHILDHOOD: THE FACTS
1.9bn of the world's 2.2bn children live in developing countries
One in two children in the developing world lives in poverty
2.2m children could be saved through immunisation each year
37% of 15 to 49-year-olds in Botswana are HIV-positive
121m primary school-age children, mostly girls, are out of school
210m five to 15 year-olds are in full-time employment
The highest incidence of child labour is in Africa, where 41% of those aged five to 14 work, compared to 21% in Asia and 17% in Latin America and the Caribbean.
Asia accounts for 60% of all child workers, however, because of its higher population, the report says.
The richest nations have already committed themselves to halving poverty and hunger and reducing child mortality by 2015.
Unicef says even if these goals are met, it will be too late for the tens of millions of children who are currently being exploited or forced to carry out destructive and demeaning jobs.
"A huge amount still remains to be done to protect children's rights all over the globe and to prevent their exploitation," said Unicef's UK executive director, David Bull.
The report calls on industrialised nations to boost aid by $50m a year, and ensure the help is better targeted to help the poor directly.
The BBC's Jannat Jalil says the world's richest nations are already discussing an ambitious plan put forward by the UK to reduce the debt burdens of poor countries and give them more aid and trade opportunities.
But, she says, some observers argue the solution does not just lie in giving more money.
They say action must also be taken to tackle the widespread corruption and lack of democracy that exists in many countries.