NSW Premier Gladys Berejiklian and Transport Minister Andrew Constance today officially opened light rail services from Circular Quay to Randwick.
The first passengers have ridden on the new L2 Randwick Line following a ribbon cutting ceremony at Circular Quay.
"It's an historic day for Sydney as light rail takes passengers down George Street for the first time in 61 years," Ms Berejiklian said.
"George Street used to be a car park with hundreds of buses and thousands of cars congested every day. Now it is one of the best boulevards in the world.
"The new network will move up to 13,500 commuters an hour during peak time, with one coupled tram holding 450 passengers, which is equivalent to nine standard buses.
"The new pedestrian boulevard will create a vibrant new shopping and dining precinct, bringing people along the route to enjoy everything it has to offer."
Transport Minister Andrew Constance said the buzz created by the testing of the light rail and at today's opening, showed there was overwhelming support for the project.
"The new light rail line will revolutionise the way that the people of Sydney travel through the CBD and South East for years to come," Mr Constance said.
"Opening the new light rail line between Randwick and Circular Quay marks the next major step to building a modern new public transport network to cater for Sydney's growing population and befits our world class city."
Trams on the L2 Randwick Line are fare-free this weekend.
Transport for NSW has partnered with Rural Aid to raise funds to support regional communities and farmers. Volunteers are collecting donations along the light rail route this weekend.
