Kirchner (left) asked the crowd to forgive the state

Their announcement came after the portraits of two former military rulers were removed from the Navy Mechanical School during Wednesday's ceremony.

It is thought some 5,000 people were tortured or murdered there during Argentina's "Dirty War" of 1976-1983.

Rights groups estimate up to 30,000 people died or disappeared in total.

Controversial

During Wednesday's emotional ceremony, President Nestor Kirchner removed the portraits of the former junta generals Jorge Videla and Reynaldo Bignone from the walls of the school, known by its Spanish acronym as Esma.

Three generals, including the head of the military's strategic intelligence unit Jorge Cabrera, and a colonel were so incensed they tendered their resignations.

The transformation of the Esma site into a "Museum of Memory" commemorating the victims of Argentina's dictatorship is the latest move by Mr Kirchner to end what he calls a "culture of impunity."

But the decision has proved controversial; in an editorial, the Clarin newspaper asked whether Mr Kirchner had moved too quickly to set up the museum.

"Evidently, society has not yet achieved reconciliation 28 years after the coup d'etat that paved the way for mass murder," the report said.

Concentration camp

But at the ceremony, victims and the families of victims cheered when Mr Kirchner signed the agreement taking control of the site.

Of around 5,000 people detained at Esma, many were tortured, drugged and then thrown out of aircraft over the Atlantic Ocean, never to be seen again.

Other victims gave birth inside the building, only for their babies to be snatched and handed over to military officials to be raised as their own.