The versatile speedster, who holds the 400m world record of 43.03, took the half-lap win at the Racers Grand Prix in 19.84 to break the two-year-old mark of 19.87 held by Anaso Jobodwana.
He finished well ahead of Commonwealth champion Rasheed Dwyer who grabbed second spot in 20.11.
Earlier, SA 100m record holder Akani Simbine took second place in 10.00 in the short dash.
Former world champion Yohan Blake of Jamaica won the race in 9.97.
“What a wonderful performance!” was the happy reaction of Aleck Skhosana, the President of Athletics South Africa. “Looks like Wade is on the roll here.
“Since announcing that he wants to contest the short sprints seriously this year, he has been on an onslaught. Clearly he is not where we all want him to be, but he is really doing very well.
“The exploits of Simbine cannot go unnoticed. His consistency has made everyone sit up and worry about what’s coming at the IAAF World Championships in August. Congratulations to all athletes and their coaches! Your hard work is coming together.”