The launch follows a London Assembly report in 2006, which said said poor communication hindered emergency services after the 7 July 2005 bomb attacks on London's transport system.
Airwave has actually been rolled out five months ahead of schedule in a £115 million deal. It will help police on the Tube respond to major incidents wherever they are on the network.
The Policing Minister said: "The Airwave system plays a vital part in keeping passengers safe. It allows police officers to communicate with each other quickly and safely to ensure an effective response to any incident.
"I am very pleased to announce that the system is now fully functioning ahead of schedule, helping frontline officers build on the excellent work they already do to tackle crime.
"Crime is down on the Underground and with the roll-out of Airwave, passengers can feel even more confident that every effort is being made to keep them safe as they travel around the Capital."
Tony McNulty, Minister for London said: "One of the key lessons from the London bombings of 2005 was the need to enhance the resilience of responders' telecommunications systems and communication underground. I am therefore delighted to see that this system is now fully in place, ahead of schedule, with the result that London is even more resilient and better prepared".
Airwave now "piggy-backs" onto a London Underground digital radio system called Connect. So the British Transport Police, no longer need to carry two radios - one for above ground, one for below.
This is all great news however, there are some concerns about whether the police network will be able to cope with demands during the 2012 Olympics when they are hosted here. Apparently the network "struggles" when a large number of users are concentrated in the same area. A security source told the BBC the system could collapse as demand is expected to increase in 2012 by 25-30%.
Also at the moment, Airwave is only available to the police. Roll out to all ambulance staff is still taking place and fire crews have a system they say works underground and is inter-operable with Airwave. However, not all crews have been given access yet.