Optical photons are excellent carriers of quantum information, but their lack of mutual interactions is a major roadblock for quantum technologies. Our setup enables such interactions by transiently injecting the photons into an intra-cavity cold atomic gas and converting them into strongly interacting Rydberg polaritons. The Rydberg-blockaded cloud then acts as an effective two-level superatom with an enhanced coupling to light. We can coherently manipulate its state, efficiently detect it, and observe state-dependent pi phase flips on the light reflected from the cavity as required for many quantum engineering tasks. We obtained the first fully deterministically-generated free-propagating states of light with negative Wigner functions. We also developed a deep theoretical understanding of the rich physics and the abilities of the superatoms, validated by experimental results. This platform opens many perspectives for developing deterministic multi-photon gates, performing quantum measurements impossible with current techniques, generating non-classical free-propagating resource states, and studying strongly correlated quantum fluids of light.