The large fall means Spain closed out 2013 with 146,293 fewer unemployed people than at the end of the 2012, according to raw data released on Friday.
There are now 4.422.359 people registered as unemployed in the country, according to figures initially leaked by a Spanish news agency and then confirmed by the Employment Ministry.
The December drop is the first such year-on-year fall since the crisis began.
It is also the first time that December has seen a six-figure drop in unemployment numbers, Spain's El Mundo newspaper reported.
December also saw 64,097 finding work and signing onto the country's social security system. But the social security registered a negative year-on-year figure with 88,000 less subscribers than at the end of 2012.
Some 1,290,853 new work contracts were signed in December, up 22 percent on the same month a year ago. Permanent contracts, however, only made up 6.49 percent of that total, against 7.31 percent in December 2012.
Prime Minister Mariano Rajoy's government touted Friday's figures as a sign that its tough reforms are finally turning the tide after a 2008 property crash tipped the nation into a double-dip recession that destroyed millions of jobs.
Engracia Hidalgo, the state secretary for employment, said the conservative government's labour market reforms, which made it easier to change conditions or lay off staff, were working.
"These are encouraging figures which inspire us to carry on working for the recovery and employment in 2014," she said.
When corrected to smooth out seasonal blips, the number of people registered as unemployed fell by 57,645 to 4.73 million, the sharpest decline since the figures were first compiled in their current form in 1996.
In the third quarter, Spain emerged from recession with 0.1-percent growth but still posted an official unemployment rate of 25.98 percent, which is calculated in a separate, quarterly household survey (the EPA).
The International Monetary Fund has warned that Spain faces five more years with unemployment rates topping 25 percent unless it enacts yet more reforms including measures to help firms slash wages instead of axing staff.