The U.S. will also be opening a new compound for its de facto embassy in Taiwan, a self-ruled island that China claims as its own and has been a longstanding flashpoint between Washington and Beijing.
Taiwanese President Tsai Ing-wen tours the new AIT complex with AIT director Kin Moy.
In remarks during the ceremony, Assistant U.S. Secretary of State Marie Royce said the new offices are a "tangible symbol" of strong U.S.
"We have faced many trials along this journey, but we have risen to the challenge at every turn, knowing that our shared commitment to democracy would see us through", Royce said at the ceremony, according to Reuters.
Taiwan papers have also reported that former AIT deputy director Brent Christensen would be promoted to lead Washington's diplomatic mission on the island.
The United States cut its formal diplomatic ties with Taiwan in 1979, recognizing the communist rulers in Beijing as the country's sole government as part of a "One China" policy. "The Trump Administration has been slow to fill key posts in the State Department, which is bad for US allies in East Asia, Taiwan included".
Tsai has also refused to acknowledge the "1992 consensus" that there is only "one China" and that Taiwan forms part of it. Beijing say the principle forms the basis of any ties between the mainland and Taiwan.
China has urged the United States to avoid having official contacts with Taiwan or improving relations in substantive ways.
Taiwan President Tsai Ing-wen said the new complex reaffirmed the "vital relationship" between Washington and Taipei.More news: Exhaust-ing ordeal: Woman gets head stuck in tailpipe
Meanwhile, the AIT is happily plowing ahead with its big move.
Since 2009, the AIT began constructing a new site in Taipei's burgeoning Neihu District, which spans about 16 acres and is a significant upgrade from the low-key military building that AIT previously used for decades.
Senior officials from the USA and Taiwan, including the island's President Tsai Ing-wen, attended a ceremony held at the American Institute of Taiwan that was built at a cost of $250 million (Rs 1,663 crore), reported South China Morning Post.
While Taiwan's relationship with the USA is essential to its security, it must also guard against provoking China, its biggest military threat but also the dominant market for the island's export-driven economy.
On Monday night, China's state-run tabloid Global Times published an editorial, suggesting Beijing should warn the U.S. and Taiwan of possible consequences for any provocative move. It manages its relations through the American Institute in Taiwan (AIT).
In December 2016, then President-elect Trump accepted a precedence-shattering phone call from Tsai to congratulate him on his election victory, marking the highest-level contact between the two sides in nearly 40 years.
Taiwan has lobbied Washington to sell it more advanced equipment, including new fighter jets, to bolster its defenses.
"I think Taiwan-U.S. relations have improved in appearance, not in substance", said Chen I-hsin, an emeritus professor of diplomacy in Taiwan.
"We must draw a red line for the USA and Taiwan".