The metro, which runs from Chatswood in Sydney's north to Sydenham in the inner west via tunnels under Sydney Harbour, is expected to carry around 37,000 passengers in morning peaks.
The opening was pushed back in July after the NSW government said more time was needed for safety checks.
Premier Chris Minns said the project was a "huge change for Sydney and a big step forward" for its transport network.
View this post on Instagram A post shared by Chris Minns (@chrisminnsmp)
He urged commuters using the new link on Monday to be patient as the line, started under the previous coalition state government, operated for the first time.
"Obviously, this will see hundreds of thousands of people get to work in a different way," Mr Minns said in a statement.
"It needs to fully integrate with the rest of the public transport system."
"It will genuinely transform the way people get to and from work, and it'll be fantastic, so Sydney enjoy the experience."
Transport Minister Jo Haylen said the opening of the line was a "truly a historic moment " in the city's history.
Up to 200,000 passengers were expected to take advantage of the new line on its opening day.
View this post on Instagram A post shared by Jo Haylen (@johaylen)
"What an incredible day to experience the first passengers travelling on the new M1 extension deep below the city and under the harbour," she said.
Passengers could travel from Sydenham to Chatswood in 22 minutes and from the CBD to North Sydney in just three minutes, Ms Haylen said.
Transport for NSW boss Josh Murray expected passenger numbers on the line to reach 250,000 on a typical weekday.
Some 445 new metro services across eight stations will run through the city each weekday.
Metro trains can carry more than 1150 people and hit speeds of up to 100km/h.
The line is part of a $21 billion public transport project of four metro lines, 46 stations and 113km of new rail in Sydney.
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