The project took eight-years to be completed and involves two 4,000-meter-long tunnels under the riverbed of the Yellow River, China's second largest river.
The project will transfer water from the Yangtze river, China's largest river, to the arid northern regions.
In 2003, its project cost was estimated to be around USD 59 billion which spiralled to USD 80 billion by the end of its completion.
The then Chairman of the Task Force on the Inter-Linking of Rivers and current Minster of Railways, Suresh Prabhu during his visit to Beijing has said India will study the project to understand how the Chinese planned to go about it.
The project was conceived by late Chinese leader Mao Zedong in 1952 but delayed over its likely impact on the environment as well as resettlement of people.
The project was approved by the State Council in December 2002, after nearly half-a-century of debate.
But the new waterway presents fresh challenges as well, such as the protection of water quality from unforeseen natural risks in the future, state-run China Daily reported.
It is the second biggest water project undertaken by China after the Three Gorges dam regarded as the world's biggest hydro-power dam.
The first-stage of the project, the eastern route, went into operation last year, sending water to Shandong province.
By 2050, as many as 440 million people could benefit from the diversion of 44.8 billion cubic meters of water each year.
The middle route begins at Danjiangkou reservoir, in Hubei province, and runs for 1,432 km. It will supply 9.5 billion cubic meters of water per year to 100 million people in the northern regions, including the cities of Beijing and Tianjin.
The South-North Water Diversion project is another feat of Chinese engineering, in the style of the Beijing-Hangzhou Grand Canal, the world's longest man-made river, constructed in the 13th century to transport grain between the south and north, the report said.
Premier Li Keqiang said the project will benefit both the current and future generations of the country.
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