Justin Bieber claimed the title earlier this month with his video for 'Baby', which has gained 803 million views since it was posted on the site in February 2010.
'Gangnam Style' went viral upon its YouTube debut on July 15, 2012, and despite being on the site for a shorter period than 'Baby', the video has already earned over 795 million views.
According to The Telegraph, the video attracts approximately 11 million hits a day, ensuring that it will soon overtake Bieber's video as the most watched clip on YouTube of all time.
Since shooting to fame, Psy has said that he has plans to follow up his hit with an even catchier single.
He has hinted that he and Bieber will be collaborating on a track together in the near future.
Watch the video for 'Gangnam Style' below: