The increase topped the gain of 0.5 per cent reading that economists had expected.
The federal agency says in the increase was fuelled by sales of motor vehicles, which gained nine per cent in December after falling in November.
Sales of machinery grew 5.2 per cent in December to their highest level since November 2011.
Excluding the petroleum and coal product industry, which fell 9.3 per cent, manufacturing sales were up 3.2 per cent.
Sales increased in seven provinces in December, led by Ontario, Quebec and B.C.