Presenting the health department's budget to parliament, Manto Tshabalala-Msimang said the decline, shown by an annual survey, pointed to a drop in infection among the population at large.
The latest survey showed the incidence among women who visited antenatal clinics fell to 28 percent last year from an estimated 29,2 percent in 2006.
Prevalence in the 15-19 age group fell to 12,9 percent in 2007 from 13,7 percent in 2006, and in the 25-29 age group, to 37,9 percent in 2007 from 38,7 percent in 2006.
"Taken together, these figures do indeed suggest that we have a trend of decreasing prevalence overall and in the younger age cohort and this trend is in line with the predictions of the UNAIDS Spectrum model," Tshabalala-Msimang said.
South Africa has one of the world's highest rates of HIV and Aids. An estimated 500 000 people in the country are infected with the deadly epidemic each year and close to 1 000 die of related ailments every day.
Tshabalala-Msimang said there was progress in the provision of treatment for those living with HIV and Aids.
"By the end of February 2008, we had cumulatively initiated more than 450 000 patients on antiretroviral treatment... This number which makes our programme the largest in the world, contradicts those voices that suggest that this government is not concerned about treatment," she said.
The government has been widely criticised for being slow to stem the spread of HIV and Aids and Tshabalala-Msimang has provoked worldwide outrage for emphasising traditional remedies in the fight against the disease.