The lake's construction is one of the world's largest building projects
Turkmenistan has launched the latest stage of a plan to channel water across thousands of kilometres of desert to create a vast inland sea.
The lake will be filled with drainage water from the country's cotton fields.
President Kurbanguly Berdymukhamedov said the "Golden Age Lake" plan showed his country was preserving nature and improving the environment.
But critics say the water will be full of fertiliser and insecticides, and will evaporate quickly.
The project is one of the biggest and most ambitious in the world, and could cost up to $20bn (£12bn).
President Berdymukhamedov, wielding a spade, opened up the first tributary to bring water to a natural depression in the Karakum Desert. The desert covers more than 80% of Turkmenistan.
He told the crowd that the lake would make the desert bloom.
The president has approved other huge construction projects in Ashkhabad
"Our initiatives to provide water and environmental security... demonstrate that Turkmenistan is making huge efforts to contribute to common work on preserving the nature and improving the environment," he said.
The water from the canals, he said, would attract wildlife and open up new land for agriculture.
Village elders in traditional clothing helped the water flow into the new channel.
After the opening ceremony, Mr Berdymukhamedov mounted a bejewelled horse to ride back to the helicopter which brought him in from the capital, Ashkhabad.
'Dead sea' fears
The Turkmen government, on its website, said the project "would go down in history of the epoch of New Revival as one of its brightest pages".
Work on the project began in 2000, with the construction of two canals which bisect the country.
Thousands of smaller feeder channels will funnel the water from Turkmenistan's irrigated cotton fields to the new lake. Treatment plants are planned to clean the water.
It could take many years to fill the lake - in the Karashor depression - but it will eventually cover 2,000 sq km (770 sq miles).
Environmentalists say a lot of the water will simply disappear into the desert's permeable soil. Large amounts, they say, will also evaporate in the high temperatures, leaving the soil extremely salty.
They predict that the Golden Age Lake will simply become a new "Dead Sea".
Analysts also fear that Turkmenistan might be tempted to help fill the new lake with fresh water from the Amu Darya, a river on the Uzbek border, which Uzbekistan relies on for irrigation. This, they say, could start a war.
Water is a precious resource in Central Asia. Drought and overuse have caused ecological disasters like that of the Aral Sea to the north, which has shrunk by 90% in recent decades.
Under the rule of former President Saparmurat Niyazov, Turkmenistan was renowned for its huge, Soviet-style construction projects. Mr Niyazov, who died in 2006, initiated the Golden Age Lake project.
Mr Berdymukhamedov came to power vowing to break with the past. But he has already approved $1bn projects for Ashkhabad, including a new five-star hotel, government buildings, a new stadium and a "Palace of Happiness" for weddings.