The Palm Fountain, which covers an area of 14,366 square feet, is located at The Pointe shopping and dining district on Palm Jumeirah, a man-made palm-shaped island.
Mask-clad people, in keeping with coronavirus safety measures, gathered on Thursday evening to watch a show of dancing jets of water, music and lights.
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"GWR is delighted to officially see The Palm Fountain breaking the title of the largest fountain," Shaddy Gaad, Senior Marketing Manager at Guinness World Records said in a statement.
"This fountain is an example of another milestone in Dubai's architectural achievements," it said, adding that Guinness was declaring it "Officially Amazing".
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Dubai, one of the seven emirates that make up the United Arab Emirates, already holds a string of world record titles -- including the world's tallest building, Burj Khalifa, and the fastest police car in service, a Bugatti Veyron.
The city that attracts millions of tourists had already one of the largest fountains in the world near Burj Khalifa.
The new fountain has over 3,000 LED lights, 7,500 nozzles and can shoot water up to 105 meters, according to Guinness.
Last month, British artist Sacha Jafri broke the record for the largest art canvas measuring 1,595 square metres, also in Dubai, Guinness said.
The 44-year-old contemporary artist has said he hoped to raise at least $30 million to fund health and education initiatives for children in impoverished parts of the world.
Dubai, which has the most diversified economy in oil-rich Gulf region, has been badly hit by the coronavirus slowdown.
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Its GDP has contracted 3.5 percent in the first quarter, following two years of modest growth.
Tourism has long been a mainstay of the emirate, which welcomed more than 16 million visitors last year.
Before the pandemic crippled global travel, the aim was to reach 20 million this year.
Dubai is now largely open for business and tourism, but infection rates have been rising in recent weeks.