The versatile speedster, who holds the 400m world record of 43.03, took the half-lap win at the Racers Grand Prix in 19.84 to break the two-year-old mark of 19.87 held by Anaso Jobodwana.
Van Niekerk shattered his personal best of 19.90, which he set when he won the SA title in Potchefstroom in April, by 0.06.
He finished well ahead of Commonwealth champion Rasheed Dwyer who grabbed second spot in 20.11.
Earlier, SA 100m record holder Akani Simbine took second place in 10.00 in the short dash.
Former world champion Yohan Blake of Jamaica won the race in 9.97.
