By Charles Haviland BBC News, Colombo

Analysts fear that this port's future phases might afford Beijing a naval facility, a prospect that worries Sri Lanka’s close neighbour, India

It has four berths for cargo.

In a ceremony at Hambantota near the island's southern tip, the water was released by President Mahinda Rajapaksa, who paid tribute to the project's financier, China.

For two years men and machines have been gouging out a huge chunk of Sri Lankan land next to the coastal town of Hambantota.

Chinese workers

Most of the project's workers are Chinese, employees of two state-owned companies, and China's Exim Bank has lent 85 percent of the cost.

President Rajapaksa has now breached the remaining piece of land separating the chasm from the Indian Ocean.

We have dug into the earth, broken great rocks, overcome inland and foreign threats President Rajapaksa

About a metre's depth of seawater will flow in each day for nearly three weeks.

The government hopes the port will get business from several thousand out of some 70,000 ships that cross the Ocean each year.

China is now the biggest lender to Sri Lanka – it's also funding a large coal power station, roads and railways, and an airport near the new seaport.

The new port has four terminals - two for cargo and two for fuel bunkering. The first ships will arrive in November; a second, equally big, phase is already being built.

The government says the ever-closening ties with China are purely commercial.

"We have dug into the earth, broken great rocks, overcome inland and foreign threats. We have now entered the path to being the true Wonder of Asia"

But some geopolitical analysts speculate that this port’s future phases might afford Beijing a naval facility, a prospect that worries Sri Lanka’s close neighbour and major benefactor, India.

The government tends to speak of this new port in nationalistic terms.

President Rajapaksa told the crowd on Sunday that this day revived the same feelings of pride and victory as the end of the civil war did.

“We have dug into the earth, broken great rocks, overcome inland and foreign threats,” he said: “We have now entered the path to being the true Wonder of Asia.”

It was not clear what foreign threats he was referring to.