Sydneysiders will now be able to enjoy a dip in the water around Barangaroo while taking in a view of the Harbour Bridge.
It's hoped the new swimming spot at Marrinawi Cove in Barangaroo will be a drawcard for locals, tourists and office workers alike.
Independent Sydney MP Alex Greenwich has been pushing for the site to open for the past three years.
He and Planning Minister Rob Stokes took a swim at the cove on Monday after announcing it would open later that day.
"The water is really beautiful down here," Mr Greenwich told AAP.
"This is really sort of the first city beach in Sydney.
"Sydneysiders have a real affection for the harbour, it shouldn't just be for people with boats."
To turn the cove into a safe swimming area, the government installed safety netting, signage and a new shower.
Further facilities, such as decking or ladders to enter the water, may be built if Marrinawi proves popular in coming months.
Mr Greenwich said workers may be lured back to their offices in Barangaroo by the new swimming spot.
But he said it was also a win for locals and could add another drawcard for tourists to lure them to Barangaroo.
Mr Stokes said the government was looking at opening up more swimming spots in urban renewal sites, including Blackwattle Bay and Bay West.
"Our city stopped building ocean and harbour pools more than half a century ago," he said.
"It's past time to provide more great, safe public places to swim."
More opportunities for swimming around the Barangaroo precinct, which was formerly shipyards, continue to be investigated.