"Labour City" which also contains two police stations, Qatar's second largest mosque and cost some $825 million to build (750 million euros), will house roughly 100,000 workers when it reaches full capacity, according to official figures.
It was unveiled by Prime Minister Abdullah bin Nasser Al-Thani and the Labour Minister Abdullah al-Khulaifi in a ceremony in the capital Doha.
The site is currently around 60 percent full and houses workers from various countries including Nepal, India, Sri Lanka and Vietnam.
Mohammed al-Maraghi, a manager with the Naaas Group, which is overseeing the site, said "Labour City" was the "model" for other camps and bigger sites may follow.
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Khulaifi has said Qatar plans to build seven "cities" to house almost 260,000 labourers, brought to work on major infrastructure projects, notably for football's 2022 World Cup which the country is hosting.
The decision to build more modern facilities comes after constant criticism of the squalid and crowded accommodation provided by Qatar for the vast numbers of migrant workers in the country.
Each room at Labour City should accomodate no more than four workers and daily inspections will be carried out to ensure that number is not breached, officials said Sunday.
The unveiling came the day before a major labour reform -- the Wage Protection System -- comes into force.
This should guarantee labourers get paid on time with salaries electronically transferred to their bank accounts.
Last week, Qatar was again widely criticised after announcing "inadequate" changes to its "kafala" labour system for foreign workers, which places restrictions on when workers can leave the country and switch job contracts.