Transport barrier formation and its relation to sheared flows in fluids and plasmas are of fundamental interest in various natural and laboratory observations and of critical importance in achieving an economical energy production in a magnetic fusion device. Here we report the first observation of an edge transport barrier formation event in an electrostatic gyrokinetic simulation carried out in a realistic diverted tokamak edge geometry under strong forcing by a high rate of heat deposition. The results show that turbulent Reynolds-stress-driven sheared E×B flows act in concert with neoclassical orbit loss to quench turbulent transport and form a transport barrier just inside the last closed magnetic flux surface
