"We're thrilled to have identified clear signs of water on a planet that is trillions of miles away," Giovanna Tinetti, a European Space Agency fellow at the Institut d'Astrophysique de Paris in France who led the study, said.
A light year is the distance a beam of light travels in one year at 300,000km per second (186,000 miles per second) or close to 10 trillion km (six trillion miles).
The Earth's moon is only 1.3 light seconds from our planet, the Sun only eight light minutes.
"Although HD 189733b is far from being habitable, and actually provides a rather hostile environment, our discovery shows that water might be more common out there than previously thought and our method can be used in the future to study more 'life-friendly' environments," Tinetti said.
Investigations showed that the planet, which orbits a star in the constellation of Vulpecula (the Fox), appeared larger at wavelength bands that corresponded to water, suggesting the substance was present in the atmosphere.
"We find that absorption by water vapour is the most likely cause of the wavelength-dependent variations in the effective radius of the planet at the infrared wavelengths," the researchers said.
HD 189733 b is known as a "hot Jupiter" planet - like the solar system's gas planet Jupiter but far hotter.
The findings contradicted earlier studies showing no evidence of water, said Heather Knutson, an astronomer at Harvard University who reviewed the findings in the same issue of Nature.
However, the earlier studies looked at light emitted from the day side of the planet while the latest research used a different method that measured light transmitted through the outer edges of the planet's atmosphere, Knutson said.
This suggested there might be something hiding a water signal in the previous measurements, she said.
"In the long term we could evaluate other planets that could support life and have water in their atmosphere," Knutson said in a telephone interview.