A coated cutting tool including a substrate and a single layer or multi-layer hard material coating is provided. The substrate is selected from cemented carbide, cermet, ceramics, cubic boron nitride (cBN), polycrystalline diamond, steel or high-speed steel. The hard material coating includes at least one layer of gamma-Al2O3, exhibiting particularly high hardness and reduced Young's modulus. The gamma-Al2O3 layer of the coated cutting tool is obtainable by means of a reactive magnetron sputtering process using at least one Al target, wherein the deposition is carried out using a reaction gas composition of argon (Ar) and oxygen (O2) at a total reaction gas pressure within the range from at least 1 Pa to at most 5 Pa, at an O2 partial pressure within the range from 0.001 Pa to 0.1 Pa, and at a temperature within the range from 400° C. to 600° C.