The Storyhouse was completed following a two-and-a-half-year project to transform the city's former Odeon cinema.
It has opened its doors after the Gateway Theatre closed in 2007 leaving no other dedicated venue for performances in the city.
The new theatre retains the character of the Grade II listed building.
As well as the 800-capacity auditorium, it features a library, independent cinema, restaurant and rooftop bar.
Funded by Cheshire West and Chester Council and Arts Council England, it has become the largest public building in the city, next to the cathedral and town hall.
Chief executive Andrew Bentley said: "We're thrilled to finally bring back a theatre to Chester after a decade-long absence.
"We've retained all the beautiful art deco features of the original building and also added a brilliant extension."
A new Â£37m theatre has opened in Chester a decade since the city's largest performing arts venue closed.