Thousands of Londoners gathered at vantage points around the city and lined the River Thames to take in the show, but the structure has been the source of heated debate during its gradual rise above capital's skyline.
Twelve lasers and 30 searchlights lit up the night sky from the dramatic glass and steel structure - which stands 310m tall - connecting it to other London landmarks as the London Philharmonic Orchestra provided the soundtrack.
The building was earlier officially launched by Qatari Prime Minister Hamad bin Jassem al-Thani, whose country funded the building, and Queen Elizabeth II's son Prince Andrew.
Prince Andrew said he hoped the building would give the local area "a huge new boost" during the formal ceremony.
London mayor Boris Johnson sang the Shard's praises, calling it "a quite astonishing piece of architecture".
Highest in Europe
"Of course it's not like any piece of architecture in the city at the moment, but that's the whole point about London," Johnson told BBC radio.
But in a nod to Londoners' split opinions on the building, he added: "I think it is important that we do not pepper-pot the city with skyscrapers everywhere. There's got to be control."
The Shard's inauguration marks the completion of the exterior of the building, located on the south bank of the River Thames at London Bridge, while work on the inside is expected to continue into 2013.
The skyscraper, whose name was coined by its Italian architect Renzo Piano, is still significantly shorter than Dubai's 828m Burj Khalifa, the tallest building in the world.
It takes over from Capital City Moscow Tower as the highest in Europe.
The 95-floor building has a glass facade covering the equivalent of eight football pitches, while the volume of concrete used in its construction could fill 22 Olympic-sized swimming pools.
London’s Empire State
It has capacity for 12 000 people and will contain a five-star hotel, 600 000m² of office space, luxury restaurants and shops.
The jagged-tipped skyscraper will also house 10 apartments, reportedly costing up to £50m each, which on floors 53 to 65 will be the highest residential properties in Britain.
Developer Sellar Property said it hopes the Shard's viewing decks, offering 360° panoramas, will become a major tourist attraction.
"It will become as essential a part of a visit to London as going to the top of the Empire State Building is for visitors to New York," said company chairperson Irvine Sellar.
The building will open as a tourist attraction in February and more than 17 500 people have already registered interest online. Advance tickets are available from Friday.
The £450m project was 95% funded by Qatar.
The tiny oil-rich Gulf state has a growing London property portfolio that also includes Harrods department store and the Olympic Village.
Slashed 'for ever'
But the building's futuristic silhouette has angered traditionalists who say it has dwarfed older landmarks such as St Paul's Cathedral and the Houses of Parliament.
English Heritage, the body responsible for protecting historic sites, says the skyscraper mars a view of St Paul's, while Unesco has said it compromises the "visual integrity" of the Tower of London, a World Heritage site.
One commentator compared the Shard's impact on the skyline to the recent destruction of ancient shrines in Timbuktu in Mali.
"Timbuktu's shrines can and surely will be rebuilt," Simon Jenkins wrote in the Guardian on Wednesday. "The Shard has slashed the face of London for ever."
Piano, who also had a hand in the design of the Pompidou Centre in Paris, has defended the building against claims it is an overbearing presence on the skyline.
"This building is not arrogant," he said in February.
"When you're making a building like this, that's so important for the city, you have to be absolutely sure that it's the right thing to do... as an architect, if you make a mistake it stays there for a long time."