The plight of the so-called "comfort women" is a hugely emotional issue that has marred relations between Seoul and Japan for decades and which, for many South Koreans, symbolises the abuses of Japan's 1910-45 colonial rule over the Korean peninsula.
Last December, the two nations reached a "final and irreversible" agreement, under which Tokyo offered an apology and one billion yen (USD 8.5 million) to open the foundation for the dwindling number of comfort women who are still alive.
"You can't silence the victims with money!" scores of protestors chanted at Thursday's opening event, which they picketed with banners reading: "This is not what the comfort women want!"
Several college students forced their way into the venue where foundation officials were due to hold a press conference, and were forcibly removed by police.
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"Listen to the voices of the victims!" one protestor shouted tearfully as police carried her and other activists out by their arms and legs.
"Some victims I met expressed gratitude for reaching the deal while they are alive," the foundation's head Kim Tae-Hyun told reporters.
She said she had talked with 37 of the 40 surviving South Korean comfort women and claimed many of them supported the foundation.
"The deal is not completely satisfactory... But we shouldn't let these controversies put out this small light of hope that we managed to find," she added.
Her comments did little to mollify the protestors, one of whom threw liquid pepper spray in Kim's face as she left the venue, forcing her to go to hospital for treatment to her eyes.