Droitwich was one of the first places to benefit from the canal building boom
The 37-year campaign by the Droitwich Canals Trust to restore the canal has been praised by British Waterways.
The restoration of the town's Barge Canal is due for completion in 2010.
The opening of the short linking Junction Canal in 2011 will create a 21 mile continuous cruising ring.
A new park gives access to the wider surrounding countryside, offering boat trips, a picnic site, play areas, and will offer information and a history of the canals.
British Waterways' Regeneration Manager, Jason Leach, said: "It's an appropriate time to place on record our gratitude to the dedication and resilience of the collective partnerships and individual volunteers - it wouldn't have happened without them."
John Noakes and Shep watch volunteers clearing Mildenham Mill Lock
The Droitwich Canal Trust was formed in the 1970s to restore the two Droitwich canals, which had been derelict since the 1920s.
Reopening the canals involved a huge amount of work, which was largely carried out by volunteers - this included:
- Four new locks.
- 500m of new channel.
- Dredging five miles of the canal.
- Building a new tunnel under the A449 Worcester to Kidderminster road.
The Trust estimate that during the project, people worked a total of more than 2,500 volunteer days.
Celebrity volunteers included John Noakes, of Blue Peter, who helped to clear mud from a lock.
The bridge over the canal at Hawford, in the 1920s
Droitwich was one of the first places to benefit from the great canal building boom of the early industrial revolution.
There are two canals in the town - the Droitwich Barge Canal and the Droitwich Junction Canal.
The barge canal is the older of the two by some 80 years - it was opened in 1771, making it one of the oldest in the country.
It took four years to build and linked the River Severn at Hawford with Droitwich.
The canal was designed and built by the famous engineer James Brindley, and some of its bridges are of significant historical importance.
The canal allowed River Severn barges - known as Trows - to pick up salt from the town.
The restored canal loop will be 21 miles long.
For this reason it is wider than most English canals - fourteen feet (4.26m) instead of the more usual seven feet (2.13m).
As well as having one of the earliest canals built in this country, Droiwtich also has one of the last to be built - the Junction canal.
This was built to link Droitwich to the Birmingham to Worcester canal, and opened in 1854.
With the coming of the railways, the Droitwich canal, like many others, lost much of its business.
The last commercial traffic on the canal was in the mid 1920s, and the official Act Of Abandonment was passed in 1939.