The channel, linking the city's busiest port to the main navigation channel at the mouth of the Yangtze River, has been dredged to a depth of 12.5 meters from 10 meters previously.
"It will be a great help as the city beefs up its shipping resources to accommodate ships which are getting bigger as well as meet an increase in cargo volume," said Chen Xuyuan, board chairman of Shanghai International Port Co, the operator.
With the waterway deepened, a ship can carry about 700 more standard containers on each load, according to the port operator.
The channel also ensures that fifth-generation container ships, which can carry 5,000 standard containers each, can berth at the six docks in Waigaoqiao.
Shanghai's container throughput grew an annual 8 percent to more than 2 million TEUs (twenty-foot equivalent units) per month.
The Waigaoqiao Port accounts for more than half of the city's container throughput. The port handles 90 vessels daily in the first three months of this year, double the volume in the same period last year.