The ocean is buried beneath 18 to 24 miles (29-39km) of ice and could be larger than the biggest of North America's Great Lakes.
Scientists made the discovery after measuring gravitational anomalies picked up by the American space agency Nasa's Cassini spacecraft, which has spent 10 years studying Saturn and its moons.
In 2005, Cassini sent back astounding images of water vapour jetting from the surface of Enceladus.
The jets were spouting from fractures in the frozen surface of the 300-mile (483km) wide moon known as "tiger stripes".
Experts theorised that a large reservoir of underground water could be fuelling the plumes.
The new findings, reported in the journal Science, confirm that a large water ocean about six miles (10km) deep really does lie beneath the moon's southern polar region.
"This water ocean... may extend halfway or more towards the equator in every direction," said co-author Professor David Stevenson, from the California Institute of Technology (Caltech).
"This means that it is as large - or larger - than Lake Superior."
Jupiter's much bigger moon Europa is also known to have liquid water under its surface. Both could be possible habitats for extraterrestrial microbes, scientists believe.
The water is kept from freezing by warming tidal forces generated by the gravity of the giant gas planets the moons orbit.
The sub-surface ocean on Enceladus sits on top of silicate rock, raising the possibility of complex chemical reactions that could create conditions similar to those on early Earth.
"Enceladus shows some similarity to Europa - a much larger moon of Jupiter - which, like Enceladus, has an ocean that is in contact with underlying rock," said Prof Stevenson. "In this respect these two bodies are of particular interest for understanding the presence and nature of habitable environments."
Cassini has flown near Enceladus a total of 19 times. Three fly-bys between 2010 and 2012 dedicated to gravity science clinched the evidence of underground water on the moon.
Measurements showed that the moon's gravitational field was stronger in the southern hemisphere than it should be.
Scientists realised that something denser than ice below the surface must be causing the anomaly. Only a large body of water could explain the readings.
Oceans of water may also be hidden under the surfaces of Saturn's largest moon, Titan, and Jupiter's moon, Callisto.
Titan has hydrocarbon lakes on its surface and a thick atmosphere rich in organic molecules.
In 2012 Cassini discovered that Titan was subject to unusually large tides, suggesting the presence of water under its icy crust.
The magnetic signature of Callisto also hints that it may hold sub-surface water.