Both European and Turkish leaders have welcomed the official start of European Union membership talks with Turkey.
Mr Gul (L) said Turkey had embarked on a new era
The opening ceremony came 40 years after Turkey took its first step towards requesting membership.
Turkish Foreign Minister Abdullah Gul said the deal - which followed more than 24 hours of fraught talks among EU nations - was a historic moment.
The move has not been universally welcomed in Europe, however, and even in Turkey popular support has fallen.
Agreement was reached on the framework for the membership talks only after last-minute wrangling by EU foreign ministers.
The turning point came when Austria withdrew its demand that Turkey be offered an option short of full membership - a possibility flatly rejected by Turkey.
Austria's Chancellor Wolfgang Schuessel has defended his country's position, saying he was "proud" of its tough stance.
Observers have suggested Austria's eventual concession on Turkey was linked to the EU's decision also to begin membership discussions with its neighbour, Croatia.
UK Foreign Secretary Jack Straw greeted Mr Gul warmly when he arrived in Luxembourg for the late-night opening ceremony.
Mr Straw called it a "truly historic day for Europe and the whole of the international community".
He warned it would be a "long road ahead", with negotiations expected to take a decade, but added, "I have no doubt that if bringing Turkey in is the prize, it is worth fighting".
Mr Straw urged Turkey to press ahead with military and judicial reforms and improve the situation in Kurdish areas of the country.
Mr Gul said the EU's decision had "made it a global actor which will play a role at the world level".
He added: "The world has opened its eyes to a new day where the East, the West, Europe and Islam will move towards union rather than confrontation. It's a big gift to the world."
Turkish Prime Minister Recep Tayyip Erdogan had insisted Turkey would not compromise on the issue of full membership.
European Commission President Jose Manuel Barroso hailed the deal as a "milestone" in Europe's relationship with Turkey, while German Foreign Minister Joschka Fischer saw it as "a big chance for both sides".
Turkish newspapers were jubilant on Tuesday - but struck a note of warning about the long slog ahead to achieve reforms and overcome deep popular opposition in Austria and other European countries to Turkey's accession.
Sceptics cite Turkey's size, poverty, and main religion - Islam - as reasons to keep it at a distance.
Former French President Valery Giscard d'Estaing on Tuesday claimed Turkey's possible accession risked replacing the "grand French project of political union" with "a large free trade zone".
In Turkey, difficulties on the path so far have seen popular support for EU membership wane from a high of 70% of those polled, although it remains strong at over 60%.