Officials say the structure will protect tourism at the Red Sea resort on the southern tip of the Sinai peninsula.
The wall is made of concrete slabs with stretches of wire fencing separating the resort from the desert around it.
Some of the slabs are marked with black peace symbols.
Tourism industry chiefs hope the security measures will boost business in southern Sinai, which has been shaken by a number of events in recent years.
In 2005, bombings in Sharm el-Sheikh killed dozens in one of Egypt’s deadliest militant attacks.
The Sinai area's fortunes also took a hit after a Russian passenger jet crashed in 2015.
Now the wall has been erected, those entering the city by road have to pass through one of four gates equipped with cameras and scanners.
Sharm el-Sheikh is about 360 km (224 miles) south of Sinai’s northern, Mediterranean coast, where an insurgency by Islamist militants has been concentrated.
“The distance between them is huge, plus there is great security with Egypt’s Second Army securing the North Sinai, and the Third Army securing South Sinai,” South Sinai Governor Khaled Fouda told journalists on a tour of the area at the weekend.
“They will be searched, security cameras will identify them, vehicles will go through a scan so that when they arrive in the city, it’ll be after a full search operation.”
A museum housing ancient Egyptian artefacts opened in Sharm el-Sheikh last year amid efforts to diversify tourism activities at the beach resort.
A university named after Saudi Arabia’s King Salman has also opened recently in the city.
Before the coronavirus pandemic, Sharm el-Sheikh often hosted international summits attended by President Abdel Fattah al-Sisi.
Additional reporting by Reuters
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