The flight from Gold Coast Airport in Coolangatta, Queensland touched down at about 2.30pm, 15 minutes ahead of schedule.
Passengers in the departure lounge were entertained by local musician Lara Rose and treated to free drinks and nibbles.
Ōtākou kaumātua Edward Ellison and mana whenua performed a blessing.
With a flight time of about three and a-half hours, the service will operate on Tuesdays, Thursdays and Saturdays, using Jetstar’s Airbus A320ceo and A320neo aircraft, delivering up to 58,000 seats annually between the two cities.
Head of Jetstar New Zealand Shelley Musk said it was an exciting occasion.
"Today is an incredibly exciting day for both Dunedin and Jetstar. This new route is a key part of our biggest expansion in New Zealand in over a decade, and we're excited to be delivering more opportunities for Kiwis to travel for less.
"We know the Gold Coast is a firm favourite for southerners, and it's easy to see why with its warm weather, stunning beaches, and world-class theme parks. For our Aussie friends, this new service provides more ways to access the stunning South Island, making it easier than ever to explore the unique charm of Dunedin, the adventure capital of Queenstown, and all the Deep South has to offer."
Toitū Otago Settlers Museum, Tūhura Otago Museum, St Paul’s Cathedral and the Dunedin Railway Station’s clockface were all lit orange to mark the occasion.
Direct travel between Dunedin and Australia was severed when Virgin Australia suspended its New Zealand services at the start of the Covid-19 pandemic, having previously offered two to three weekly flights from the city.
Dunedin Airport had since offered a couple of one-off chartered international flights, including three Qantas flights for last year’s Pink concert and a Fiji Airlines flight, which transported the supporters of the Fijian Drua to watch their team’s match against the Highlanders.
