Once one of the world's grandest buildings, the Berlin Palace – or Stadtschloss – was built in the 15th Century, but transformed in the 1700s as a home for the King Frederick.
The ornate Baroque building was badly damaged during the Second World War and demolished in 1950 – only to be replaced by East Germany's parliament building – itself now knocked down.
Eleven years ago parliament agreed to reconstruct the 18th Century palace, but until now the project was mired in a constant stream of delays and financial hold ups.
However, President Joachim Gauck laid the foundation stone of the building amid much ceremony on Wednesday, signalling the launch of a €590m (£500m) development, that on completion in 2019 will house a modern museum containing Berlin's collections of African and other non-European art.
Part of construction site of Berliner Schloss (Reuters)
Rebuilding the palace is a step toward "healing the wounds" left on Berlin's landscape by its Cold War division, said Peter Ramsauer, the cabinet minister responsible for construction. He described the project as overcoming "the architectural devastation wrought after the demolition of the old palace".
But it has not been met with universal enthusiasm.
Some former East Berliners had fond memories of the Palace of the Republic, the 1970s East German Parliament building, which also housed restaurants and a bowling alley but was considered an eyesore by most westerners.
"Berlin needs many things, but not a baroque palace," said Stefan Liebich, an opposition Left Party politician.
Renate Kuenast, a leader of the opposition Greens, criticised the architecture for being a simple copy of the Baroque original. "I'm a little sad that they didn't find a more creative model," she said. Others complained about the cost at a time of austerity.
Klaus Wowereit, mayor of Berlin, dismissed the criticism. "It would perhaps have been popular to say, we'll do without a palace in these times of financial crisis," he said. "But it is much more than recreating a historical building."