Located where the Berlin Wall once dissected the city, the huge €1.1-billion complex now houses 4,000 of the spy agency's 6,500 staff.
Built on the former site of an East German sports stadium, it is one of the
world's largest secret service bases, covering 10 hectares (25 acres) — the equivalent to 36 football fields.
Pointing to a host of global threats from terrorism to cyber-attacks, Merkel thanked the BND staff for their work “so that millions of Germans can live in safety”.
For the BND, which until now has been cloistered away in a former Nazi settlement outside Munich since its founding after World War II, its bold new presence is meant to signal a more self-confident global role.
The massive limestone and aluminium-fronted structure in central Berlin affords Federal Intelligence Service chief Bruno Kahl a view of the chancellery building, which he reports to.
The BND, hit by a series of scandals — most recently the 2013 revelations
of fugitive US intelligence leaker Edward Snowden — has also signalled
greater transparency to a sceptical public.
Mid-year it even plans to open a visitor centre, having already built up its online presence and stepped up open recruitment activities for the next
generation of German spies.
For many Germans, given their country's fascist and totalitarian past, the
idea of a secret service evokes images not just of James Bond but also of the Gestapo and Stasi.
The far-left opposition Die Linke party routinely demands the abolition of
Germany's three intelligence agencies, also including the domestic BfV and military spy service MAD.
Merkel stressed that while the Stasi “was used against the populace”, the
BND serves the country and is subject to laws and parliamentary oversight.
“A healthy distrust is helpful, but being overly suspicious is a hindrance,” said Merkel.
Many Germans were shocked by Snowden's revelations that the BND had closely cooperated with US and British services in the near-blanket surveillance of the world's digital communications.
Merkel, who grew up in the East German police state, herself expressed anger at news that Washington had for years tapped her mobile phone, insisting that spying on allies “is not on”.
But Germany was soon forced to admit that the BND had itself eavesdropped on targets including the French presidency, the EU and international media organisations.
Last year the world's largest internet hub, the De-Cix exchange in Frankfurt, challenged the BND over its mass capture of international communications, but a German federal court in May approved the surveillance.
The massive operation to build the new BND headquarters, too, did not pass without delays, budget blow-outs and glitches.
In 2011, the agency had to admit that the blueprints for the sprawling new
complex had been stolen, but played down the security risks posed by the loss.
And in 2015, thieves broke into the building site and stole newly fitted water taps, causing massive flooding damage that media dubbed the “Watergate” scandal.
Former BND chief Gerhard Schindler on Friday complained that the agency's technical surveillance had stayed behind at the old Bavarian base, saying there was “no rational, logical reason” for this.