The female calf was born at 5:40 am on western Sumatra island, a spokesman for the environment ministry said.
It was the second baby born to rhino Ratu. Her previous birth four years ago marked the first time a Sumatran rhino had been born in an Asian breeding facility for more than 140 years.
The new calf and Ratu, whose name means "Queen" in Indonesian, were both in good health, with the newborn feeding within two hours, spokesman Novrizal Tahar told AFP.
Ratu was observed stretching in her maternity pen in recent days, a signal her long-anticipated delivery was nearing.
"Could tonight be the night?" the International Rhino Foundation posted online just hours before the birth, alongside footage of the 17-year-old pregnant mother.
Sumatran rhinos are extremely rare, with just 100 believed to exist in the world. The birth is a major boon for the species, which last year was declared extinct in Malaysia.
Ratu, a wild rhino who wandered out of the rainforest and into the Sumatran Rhino Sanctuary in Way Kambas National Park a decade ago, had become pregnant after meeting with Andalas, a male rhino at the park.
Despite being the smallest of the five remaining rhino species, Sumatran rhinos have very long pregnancies that last about 16 months.
Harapan -- the brother of Andalas -- was transferred from the United States to the Sumatra-based rhino sanctuary last November in the hope he would find a mate.
In March, environmentalists made physical contact with a Sumatran rhino on the Indonesian part of Borneo island for the first time in 40 years, but it died a month later.
While Javan rhinos are considered the world's rarest, Sumatran rhinos are under increasing threat by poachers and continue to lose precious forest habitat.
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