About 15-20 South Korean officials will work at the office from 9 to 5, sleep at nearby lodgings in Kaesong on weekdays and take turns staffing the office on weekends.
Ri Son Gwon, chairman of the North's Committee for the Peaceful Reunification, said during the ceremony that the office would help the Koreas have "candid conversations" and further build up their ties, according to South Korean media pool reports from the site.
"The third summit will bring more clarity to what North Korea means with the complete denuclearization of the peninsula", said Kim Taewoo, former president of Seoul's government-funded Korea Institute for National Unification.
The co-heads will meet every week.
The 4-story building includes separate Northern and Southern offices and a joint conference room, and Seoul's unification ministry said it would become a "round-the-clock consultation and communication channel" for advancing inter-Korean relations, improving ties between the USA and the North, and easing military tensions.
The opening ceremony was attended by South Korean officials and others from the parliament and academia.
Both Koreas are calling for a declaration by the end of the year, but the U.S. wants to see more concrete steps toward denuclearization first, and some analysts say a declaration could put pressure on the United States to withdraw its troops from South Korea.
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The Koreas will be able to "directly discuss issues 24 hours, 365 days", Seoul's Unification Minister Cho Myoung-gyon said.
The office was widely expected to be launched in August, but its opening was delayed amid Washington's anxiety that inter-Korean cooperation is progressing faster than its stalemated denuclearization talks with the North.
South Korea's presidential office said separately that it will hold working-level talks with North Korea on Friday to prepare for next week's inter-Korean summit in Pyongyang.
The office will be co-headed by Vice South Korean Unification Minister Chun Hae-sung and a deputy head of Ri's committee. But those channels have often been suspended when tensions rose over North Korea's nuclear program.
The office is at the site of the Kaesong industrial complex, where for about a decade, South Korean companies ran production lines staffed by North Korean workers at the industrial park. The park, which combined South Korean initiatives, capital and technology with North Korea's cheap labor, was seen as a test case for unification of the Koreas.
The resumption of the Kaesong park and other dormant inter-Korean cooperation projects aren't likely to happen anytime soon because US-led global sanctions on North Korea remain in place.
Shin Han-yong, head of a task force that speaks for the South Korean firms that operated factories in Kaesong, was among those invited to the opening event. "Therefore, he will try to play role of a facilitator or a mediator between Pyongyang and Washington", the top adviser told reporters.
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