Prime Minister Narendra Modi, his Bangladesh counterpart Sheikh Hasina and West Bengal Chief Minister Mamata Banerjee jointly flagged off the train service through video link from New Delhi.
Regular passenger train service between Kolkata and Khulna would commence from July, a Railway official said.
Hundreds of curious onlookers gathered at the station as the beautifully decorated train chugged into pages of history.
A 43-member delegation from Bangaldesh accompanied the flower-bedecked five-coach train of Bangladesh Railway.
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"We will have discussions with the Indian officials regarding immigration formalities of the new train service," Mijanur Rahman, SP of Bangladesh Police's special branch, said.
Immigration formalities for passengers of the train, when regular services are introduced, would be done at the originating stations and not at the border crossing, thus reducing a lot of travel time, Eastern Railway spokesperson R N Mahapatra.
This will ensure hassle-free journey for passengers between the two neighbouring countries, he said.
At present, Maitree Express, which runs four days a week between Kolkata and Dhaka, is the only passenger train link between the two countries.
Indo-Bangla rail corridor through Petrapole-Benapole was reopened in January, 2001 for goods trains, he added.