The £2million pedestrianisation scheme in Wolborough Street-Bank Street was officially opened on Wednesday.
To mark the event, the bells of St Leonard's Tower were rung for an hour from 9.30am.
This was followed by the unveiling of a commemorative tablet in Wolborough Street by county council chairman Cllr John Rawlinson and Teignbridge Council chairman Cllr David Weekes.
Youngsters were entertained by a Punch and Judy Show, live music, a juggler and balloon modeller.
Newton Abbot mayor Cllr David Corney-Walker also attended.
'It was a really great launch and we were thrilled that so many people turned out to support it,' he said.
'It was great to see so many tables and chairs outside in the immediate area of the launch and people enjoying themselves. It proves the cafe culture is happening in Newton Abbot, which is what we wanted.
'This scheme will really enhance the town, and this is only the first stage. We have to keep continuing to improve the town. It all comes down to money, but if the powers that be with the cash say no, we'll keep knocking and won't give up.
'It is encouraging to see Newton Abbot so busy during the current economic climate. We are weathering the storm, thanks to the array of shops in the town.'