Researchers at the University of Engineering and Technology (UTEC) in Lima and advertising agency Mayo Peru DraftFCB joined forces to launch the billboard, the BBC reported.
UTEC said that they wanted to put "imagination into action" and show that it is possible to solve people's problems through engineering and technology.
"A billboard that produces drinking water from air," the billboard reads.
And it does what it says on the tin. So far, the billboard has produced over 9,000 litres of drinking water - 96 litres a day.
The panel is strategically located in the village of Bujama, an area south of the capital city that is almost a desert, where some people have no access to clean water.
Despite tough conditions with little rain, air humidity reaches 98 percent, UTEC said.
"The panel traps humidity in the air and transforms it into water. It's that simple," Jessica Ruas, a spokesperson from the university said.
Ruas said that the system might become a wider solution for the problem.
Internally, the panel consists of five devices that extract water vapour from the air using a condenser and filters.
Water is stored in tanks at the top of the structure. Once filtered, it flows down a pipe connected to a tap, accessible to everybody.
The internal system costs some 1,200 dollars to set up.