The outbreak of the B.1.1.529 lineage of SARS-CoV-2 (omicron) has caused an unprecedented number of Covid-19 cases, including pediatric hospital admissions. Policymakers urgently need evidence of vaccine effectiveness in children to balance the costs and benefits of vaccination campaigns, but the evidence is sparse or non-existing. Leveraging a population-based cohort of 490,694 children aged 3–5 years, we estimated the effectiveness of administering a two-dose schedule, 28 days apart, of CoronaVac using inverse probability-weighted survival regression models to estimate hazard ratios of complete immunization over non-vaccination, accounting for time-varying vaccination exposure and relevant confounders. The study was conducted between December 6, 2021, and February 26, 2022, during the omicron outbreak in Chile. The estimated vaccine effectiveness was 38.2% (95%CI, 36.5–39.9) against Covid-19, 64.6% (95%CI, 49.6–75.2) against hospitalization, and 69.0% (95%CI, 18.6–88.2) to prevent intensive care unit admission. The effectiveness was modest; however, protection against severe disease remained high.