The Radyr Weir hydro scheme uses the current to rotate two turbines and it is estimated it will generate enough electricity to power 550 homes.
Its design still allows migratory fish to swim upriver and spawn.
Now that the system is up and running, the section of the Taff Trail which was closed to allow work to happen will reopen.
Ramesh Patel, Cardiff council's cabinet member for transport, planning and sustainability, said: "It gives me an enormous amount of pleasure and indeed pride to open this scheme which is a permanent reminder of the council's commitment to generate and invest in clean, locally-generated energy."
A £2.6m project which uses the power of the River Taff in Cardiff to generate electricity has opened.