The unprecedented detection was made on K2-18b, which is eight times the mass of our home world.
It is known as an exoplanet because it orbits a star outside the solar system, and is the first of its kind that is known to feature both water and temperatures suitable for life to exist.
Those hoping to jump ship will be disappointed to hear that K2-18b is a whopping 110 light years from Earth, and may also have been exposed to dangerous radiation due to its highly active red dwarf star.
But the UCL researchers who made the discovery on K2-18b remain excited by the potential implications of their find, because they say it brings us closer to knowing whether Earth is truly unique.
Professor Giovanna Tinetti, the co-author of the study, told Sky News: "K2-18b might have a boring name, but it is a very exciting planet - it is the first super-Earth in which we can find there is an atmosphere.
"On top of that, there is water vapour in the atmosphere.
"What makes that really exciting is that the planet is in the so-called habitable zone.
"This means it has a temperature that is quite mild and temperate, so it is potentially good for life."
The discovery, published in the journal Nature Astronomy, is the first successful atmospheric detection for an exoplanet orbiting in the "habitable zone" of its star, meaning it is at a distance where water can exist in liquid form.
Scientists used data captured by the NASA/European Space Agency Hubble space telescope in 2016 and 2017 as the basis of their study, and developed algorithms to analyse starlight being filtered through the atmosphere.
The results revealed the molecular signature of water vapour.
The discovery also indicates the presence of hydrogen and helium, and the UCL team believes other molecules including nitrogen and methane may also be present, with further study required to reveal more.
Prof Tinetti said K2-18b, which was discovered in the Leo constellation in 2015, would likely be the first of many potentially habitable planets to be found.
It is one of hundreds of so-called super-Earths, defined as planets with a mass between Earth and Neptune, that have already been found by the NASA spacecraft Kepler.
Hundreds more are expected to be detected by another NASA mission, TESS, in the coming years.
Prof Tinetti said: "We want to make sure we analyse more planets, similar to K2-18b but perhaps also different, and extract more from K2-18b.
"We still don't know exactly what it means, being habitable. We have a list that includes having an atmosphere, having water, having a temperature that is suitable for life, and this planet is ticking all the boxes.
"But it doesn't mean that it is good for us as human beings. On Earth, there are many microbes and bacteria that are perfectly happy living in conditions that are very cold, very hot, very acidic and so on.
"So when we say habitable, it doesn't necessarily mean for human beings."
Dr Angelos Tsiaras, of the UCL Centre For Space Exochemistry Data, added: "K2-18b is not 'Earth 2.0' as it is significantly heavier and has a different atmospheric composition.
"However, it brings us closer to answering the fundamental question: Is the Earth unique?" Future space telescopes will be able to characterise atmospheres in more detail thanks to more advanced equipment.
One such telescope, known as ARIEL, is due to be launched by the European Space Agency in 2028 and will observe around 1,000 planets to paint a more detailed picture of what they are like.
Prof Tinetti, principal investigator for ARIEL, added: "By observing a large sample of planets, we hope to reveal secrets about their chemistry, formation and evolution."
The research was funded by European Research Council and the UK Science and Technology Facilities Council.