All South African babies under the age of one will be treated if they test HIV-positive, President Jacob Zuma has announced in a major policy overhaul.
In a widely welcomed speech to mark World Aids Day, he promised more anti-retrovirals - drugs which the previous government said were too costly.
And he announced he was preparing to take an HIV test himself.
Each year 59,000 babies are born with HIV in a country where 5.2 million people live with the virus.
South Africa is the nation with the highest number of people living with HIV.
Mr Zuma's speech is a marked departure from Mr Mbeki, whose government denied the link between HIV and Aids.
Mr Mbeki's critics have accused him of causing about 300,000 deaths by not rolling out anti-retroviral drugs (ARVs) to people with HIV quickly enough.
His government's statements on HIV and Aids and its suggestion that anti-retrovirals could be poisonous contradicted the advice of the world's major health organisations.
'Era of openness'
Mr Zuma's change of policy was welcomed by the opposition Democratic Alliance as "the new spirit of activism" on HIV.
The Treatment Action Campaign, which took legal action against Mr Mbeki's government to secure ARVs, hailed the announcement as a "positive change".
The UK's Department for International Development also welcomed the decision.
"South Africa has turned a corner and is embarking on a new and bold drive to take responsibility for tackling HIV and Aids," a spokesperson said.
"The UK will continue to support South Africa to realise its ambition of reducing new HIV infections and increasing access to effective treatments."
Currently, treatment is available in South Africa only for people whose immunity levels have been significantly reduced by HIV.
Mr Zuma announced in his speech that the drugs would be available more widely to children and pregnant women.
He described it as the start of "an era of openness" and urged South Africans to take responsibility for themselves.
"I am making arrangements for my own test," he told crowds in Pretoria.
"I have taken HIV tests before, and I know my status. I will do another test soon as part of this new campaign. I urge you to start planning for your own tests."
He said the measures would come into force in April next year.
South Africa already runs the world's largest anti-retroviral programme but analysts say almost one million people still go without treatment.
The US has announced it will give $120m (£73m) to help South Africa buy more anti-retrovirals, in response to a request from Pretoria.
The rate of HIV infection in the country has levelled out - with no increase in the number of people contracting the virus each year.
But health campaigners are warning that the number of Aids-related deaths is set to rise significantly in the next five years, as the illness takes effect on those who have had it for a long time.
South African charities warned this week that 5.7 million children - a third of all the country's children - could lose one or both parents to Aids by 2015.
Currently there are 1.4 million Aids orphans in the country.