Mayor Ray Nagin made the announcement at a late morning news conference.
Similar projects elsewhere have been stalled by stiff opposition from telephone and cable television companies aimed at discouraging competition from public agencies.
Nagin said the system started operation Tuesday in the central Business District and the French Quarter. It is to be available throughout the city in about a year.
The system covers the city using hardware mounted on streetlights.
Most of the equipment was donated by three companies: Intel Corp., Tropos Networks and Pronto Networks.
The system will operate at 512 kilobits per second as long as the city remains under a state of emergency.
That will be slowed once the state of emergency is over — that date has not been determined — to 128 kps in accordance with state law, which restricts government-owned Internet service.
The Washington Post reports that the WiFi communications for government services are helping the city speed its recovery. Greg Meffert, a deputy mayor, said the biggest benefit has been enabling building inspectors to quickly process paperwork for reconstruction permits without having to travel back and forth to city offices.