It's an endeavour Egyptian President Fattah al-Sisi hopes will revive the economy by allowing more and bigger ships to pass through.
But there are doubts over whether the project will meet its ambitious expectations.
It was a spectacular event that attracted leaders from all over the world.
The opening of Egypt's new Suez Canal was in the town of Ismailia, where fighter jets and helicopters soared above in celebration.
International leaders including French President Francois Hollande, Russian Prime Minister Dimitry Medvedev, King Abdullah of Jordan and the King of Bahrain, Hamad bin Isa Al Khalifa, joined Egyptian President Fattah al-Sisi for the opening.
"I, Abdel Fattah al-Sisi, the President of the Egyptian Arab Republic, permit the starting of the operation of the new Suez Canal and long live Egypt and long live all people of the world."
On the streets of Cairo, locals erected banners in triumph of the project, many seeing it as a turn-around for the nation after years of instability.
"This is a great leap forward in Egypt's history and civilisations, and proves it is at the centre of the Middle East."
President al-Sisi hopes the US $8 billion dollar project will steer an economic shift for Egypt's ailing economy.
The project, initially predicted to take three years, was completed in just one.
At the inauguration the Egyptian leader hailed the project as historic.
"Egypt did not only present this project during this year or the previous two years, to be exact. History will record that Egypt stood against and fought the most dangerous extremist ideology."
Daily canal traffic is expected to almost double.
By 2023 the Suez Canal Authority expects revenue to hit 13 billion dollars - compared to five billion last year.
But some are questioning whether the projected revenue targets will meet expectations.
Dr Bob Bawker is a professor at the Centre for Arab and Islamic studies at the Australian National University.
He says the projections are extremely optimistic.
"To achieve them would require a substantial increase in the amount of shipping that is currently going thru the canal and a remarkable upsurge in global trade using the canal."
Dr Bob Bawker says there will be some increase in the usage of the canal, but not a huge amount.
He says it has as much to do with politics as it does revenue.
"The effect will be fairly modest but and the purpose behind constructing the canal has at least as much to do with the ambitions of the government to boost Egyptian confidence in their own economic outlook as it has to do with the revenue impact."
In terms of the impact on Australia, Dr Bawker it's likely to have minimal impact on exports.
"Australian exports to Egypt - and we export about $440 million dollars of good a year - are mostly in the form of live cattle. I think we might start exporting some natural gas there soon, possibly some coal - but all of those would be unloaded on the Australian end of the canal."
But despite any criticism, Dr Bawker says Egyptians have every right to celebrate.
"Egyptians love a party- and God bless them, they deserve a party. They've had an awful time over the last three years. And whether it's removing a statue of Ramses the second from one side of Cairo to the other or expanding the Suez Canal - the Egyptians are just pleased they can have something to which they can say 'we've done this and we've done it well'."
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