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He launched the first phase at a rally here in the presence of Chief Minister Vijay Rupani and Deputy Chief Minister Nitin Patel.
"This is the first of its kind project not only in India but also in South-East Asia," Modi said at the rally which comes ahead of the Assembly polls in the state.
"This is also a unique project as the state government has used the latest technology to make this ferry service possible," he said.
The Prime Minister had earlier termed this as his "dream project".
He is later scheduled to make a trip from Ghogha, Bhavnagar district, to Dahej, Bharuch, on the ferry. From Dahej, he will leave for Vadodara where he is slated to inaugurate and lay the foundation stone for projects worth over Rs 1,140 crore.
According to Ajay Bhadoo, the chief executive officer of Gujarat Maritime Board which has executed the ro-ro project, the first phase of the service is meant for passengers.
In the second phase, which will be ready in two months, cars can also be carried between the two towns.
The service reduces the distance between the two towns from 310 km by road to 30 km, which can be covered in one hour, Bhadoo said.
Modi had laid the foundation stone for the project in January 2012, when he was the chief minister of Gujarat.
The Prime Minister had earlier visited poll-bound Gujarat last Monday when he addressed his party workers at a rally in Gandhinagar.
Prior to that, on October 8, Modi visited his hometown Vadnagar. He also inaugurated and laid the foundation stone of various projects in Rajkot, Vadnagar, Gandhinagar and Bharuch.