A $1.9 billion canal linking the South Korean capital Seoul to the Yellow Sea opened Friday after two decades of controversy which halted or delayed construction.

The 18-kilometre (11-mile) "Gyeongin Ara Waterway" starts at the Han river which bisects Seoul and meets the sea off the western port of Incheon.

The 2.24 trillion won ($1.9 billion) project began in 1992, mainly to reduce flooding. But construction was suspended several times because of objections from environmental groups, activists and politicians.

Construction resumed in 2009 after President Lee Myung-Bak made it part of his bold "Green New Deal" project to dredge, dam and beautify South Korea's four major rivers.

"Today we realised our long-cherished desire by opening a waterway connecting Seoul to the open sea," Lee told an opening ceremony at a riverside cargo terminal.

The Han river estuary area is close to the tense border with North Korea and ships have for decades been banned from sailing from the sea up to Seoul. The canal follows a more southerly route.

Cargo ships using the canal will not only serve the domestic market but also expand their business to China, Japan, Russia and Southeast Asia, Lee said.

The waterway would create some 26,000 jobs and bring annual economic benefits worth three trillion won, he forecast.

The waterway, 80 metres (264 feet) wide and 6.3 metres deep, can accommodate ferries and cargo ships with a maximum capacity of 4,000 tonnes.

After the ceremony a 3,096-tonne cargo ship left for Qingdao in China, becoming the first vessel to use the waterway.

Lee said the canal, flanked by bicycle paths and parks, would also become a tourist attraction. Government officials plan a variety of events including festivals and concerts.

"I hope the 18-km waterway will provide a turning point in opening a green future for our country," he said.

Some experts and activists still doubt its usefulness.

"Almost 2.5 trillion won was spent but the economic viability of the waterway is in question," a coalition of religious and civic groups said Friday in a statement.

The canal will freeze over and become useless in winter while structural problems at its terminals will delay cargo handling, the coalition said.