Days after protests in Berlin over the conflict between Israelis and Palestinians in Gaza, and at a time when politicians are warning of rising antisemitism in Germany, the "House of One" offers a beacon of hope for dialog, said its founders.
"It is important that dramatic world conflicts can be discussed in the German capital and that people have a stage to highlight problems in their countries and express their opinions," said Berlin Mayor Michael Mueller at the ceremony.
"But hatred and violence, antisemitism and Islamophobia, racism and incitement have no place in our society," he added.
The building, with a tall square tower, will contain separate rooms for religious services and a common area for meeting.
The heads of Germany's Central Council of Jews and Central Council of Muslims have welcomed the project and the religious exchange it aims to make possible.
Construction work, which started after 10 years of planning, will take four years and cost 47.3 million euros ($57.67 million). The German government is contributing 20 million euros, the city of Berlin 10 million euros and the rest will come from other contributors, including donations from abroad.
The center will be built on the site of a 13th century church which was destroyed by the Communist East German government in the 1960s.
"The House of One project sends an important signal at this time," Heinrich Bedford-Strohm, head of the Protestant church in Germany, told RND media."Anti-Semitism and Islamophobia are increasing. But they take people in the wrong direction, they fuel hatred and potentially lead to violence," he added.