The move comes after a year of deliberation and means that Google joins Microsoft and Yahoo in using servers hosted in China. This will give it a significant speed advantage over uncensored search engines.
Such external sites have to pass through the 'Great firewall of China', a network of government servers used to determine what Chinese internet users are allowed to see.
"This was a difficult decision for Google. On balance we believe that having a service with links that work and omit a fractional number is better than having a service that is not available at all," said the company on its blog.
"It was a difficult trade-off for us to make, but one that we felt ultimately serves the best interests of our users in China."
The move has generated dismay and anger among human rights organisations and internet users alike.
"The launch of Google.cn is a black day for freedom of expression in China," said worldwide press freedom organisation Reporters Without Borders.
"Like its competitors, the company says it has no choice and must obey Chinese laws, but this is a tired argument.
"Freedom of expression is not a minor principle that can be pushed aside when dealing with a dictatorship. It's a principle recognised by the Universal Decla ration of Human Rights and features in the Chinese national constitution itself."
Reporters Without Borders wrote to Google founders Larry Page and Sergey Brin in May last year asking whether they were going to censor their tool for the Chinese market, and expressing concern at some recent Google decisions.
Article six of Google's 10 philosophies states: 'You can make money without doing evil.' Article eight states: 'The need for information crosses all borders.'
Ursula Owen, editor in chief of Index on Censorship, which has monitored and highlighted censorship around the world for over 30 years, said that she was shocked by Google's decision.
"Google did not need to do this and is doing it for the money," she said. " How rich do people have to be? If they hadn't done it and had taken a stand, maybe others would stand by them."
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