Scientists at its Cambridge UK labs successfully demonstrated its Quantum Key Server system, which refreshes keys without interruption, on video.
Simply put, quantum cryptography involves encoding bits of encryption data onto particles of light - photons.
It is an emerging technology which is set to revolutionise digital security.
Current distribution methods for keys, which are needed to decrypt secure messages, are not as secure.
When data and files need to be encrypted, or made unreadable and therefore secure from prying eyes, long numeric keys - in ones and zeros - are used to scramble the data.
The intended recipient is able to descramble or unlock the data using another set of numbers - the key.
Applications using secure quantum cryptographic techniques are about three years away, according to Toshiba's Dr Andrew Shields, who leads the development group.
Toshiba's breakthrough showed that each frame in a video file could be encrypted using separate keys, which means that cracking one frame of a video - already difficult - would be useless unless all the other frames were cracked too.
"The key innovation has been to make the system work continuously," Dr Shields explained to the BBC News website.
"This is important if you want to stream data like video. We can send keys, and just by looking at them can tell if someone has read them en route," he said.
The laws of quantum physics guarantee that the properties of the photon changes if anyone intercepts it and tries to read the information from it.
"Imagine if you received a letter, you opened that letter and read it, there is no way of telling if someone has read that letter en route.
"When you encode the information on single particles, the letter self destructs whenever someone else reads it.
"I sometimes say it is like the messages in Mission Impossible. If anyone tries to read the messages, they self destruct," said Dr Shields.
The self-managing system can operate 24 hours a day, seven days a week.
It could be extended to securely encrypt other data files which require high bandwidth, like sensitive legal documents, tax records or medical histories, added Dr Shields.
It could also be used to provide an ultra-secure link between separate corporate sites allowing for extremely secure file transfers over fibre optic networks.
Company computer networks, where the technology will first be used, are increasingly vulnerable to the theft of keys from desktop machines.
Often this is through hacking attempts, Trojan programs deposited on computers, or fraudulent employees.
Toshiba's Quantum Key Server technology would make key theft futile because it allows frequent key refreshing.
Quantum encryption will eventually give companies a "once and for all" security system, said Dr Shields.
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