The shelter at Kensington Olympia exhibition centre in London, run by the charity Crisis, will provide more than 400 camp beds as well as televisions, medical care and drug advice over the next week.
The Olympia hall is part of a network of 23 shelters, day centres and outreach services that will open their doors across Britain to provide companionship to an estimated 5,000 people. The shelter will offer guests warm clothing,haircuts, massages and arts facilities as well as Christmas dinners.
Louise Casey, head of the Government's rough sleepers unit, opened the facility yesterday and repeated her view that the best option for the "hardcore" homeless was to move into hostels or permanent housing.
Ms Casey triggered controversy last month when she criticised soup runs for encouraging people to stay on the streets, but refused to back down from her strategy.
Yesterday, she was told by Crisis volunteers that one-third of the guests at the shelter were expected to be rough sleepers, one-third those who sleep on friends' floors or in hostels, and one-third made up of those with a home but unable to face Christmas alone.
"The support provided by Crisis volunteers is vital at a time of year when rough sleepers often feel isolated and lonely," Ms Casey said. "What is astonishing is that so many people expected to come to the Crisis shelter have somewhere to live, but are too lonely to stay there. That is something we hope to change with long-term support for those who are rehoused."
Shaks Gosh, chief executive of Crisis, said the charity was increasingly working with people who were housed but found it very difficult to maintain their tenancies after years on the streets. Last year, one in eight arriving at the charity's shelters reported feeling suicidal as the countdown to Christmas began. One in 20 had tried to take his or her life.
"There is a sense of community on the streets that people miss once they become housed," Mr Gosh said. "It is essential that we support people facing these difficulties, otherwise there is a very real danger that people will end up on the streets again.
"We are delighted that for the last Christmas of the 20th century, we have the most prestigious venue ever for the Crisis Open Christmas. It symbolises our determination to mainstream homeless people back into the community."
Yesterday, one guest at the shelter explained that despite having his own flat, there were days when he saw no one. "I come for food and clothing and a little bit more comfort than in my own place. I had no electricity; all I had was a sleeping bag. This is the first haircut I've had all year."
In addition to the main shelter at Olympia, three other shelters will open over Christmas in locations around London, including a women's shelter and one for alcoholics. Now in its 27th year, the charity works all year round to offer services for the single homeless.