About 80 people gathered in Luggate to mark the opening with a karakia, speeches and a ribbon-cutting by Queenstown Lakes District Mayor Glyn Lewers and Luggate boy Maru Dawson, 7.
Luggate Community Association chairman Rod Anderson said he had been a strong advocate for the playground and the reopening was a "milestone day" for Luggate.
"Just to walk down the street and hear the laughter and [children] yelling out to each other, it’s great to see there’s something there for the kids now," Mr Anderson said.
"It’s been quite a spell where they’ve had no playground at all."
The playground was closed during the construction of the Luggate Memorial Hall.
"With the construction of the hall the playground equipment was all inspected and deemed to be past its use-by date," Mr Anderson said.
"I’ve got to admit that the playground is much greater than I anticipated it to be,’ Mr Anderson said.’
He hoped it would be a place for Luggate families to gather, socialise and be "an area for the parents of the local community to congregate and have a yarn".
Mayor Lewers said the playground complemented the memorial hall.
"It’s great to see the investment in smaller communities."