Erick Tseng, a Google engineer demonstrating one of the phones, said "it is a great marriage of form and function ... It is really light".
Google employees received the handsets - about the thickness of a pencil and no heavier than a Swiss Army knife keychain - three weeks ago for a final round of internal testing.
Innovations such as 3D graphics are included on the Nexus One, which will be on sale for $179 with a T-Mobile service contract.
However, they will be sold on the Google-hosted web store for $529 free from a contract with a mobile operator.
The firm has partnerships with telecommunications firms Verizon in the US and Vodaphone in Europe, where the handset should be available from the middle of this year, but the phone is designed to be used with any carrier.
"You can take out your SIM card from any provider and put it in the phone," Mario Queiroz, Google's vice-president of product management, said.
Such a choice of carriers could post a threat to the iPhone, which is tied exclusively to AT&T in the US.
Google said the wireless market has only seen "the beginning of what's possible" with the free Android operating system that it introduced for mobile phones in late 2007.
Android was designed to make it easier to interact on a mobile phone with websites and services, including Google's, while providing an egalitarian platform to run open source applications developed by outside programmers.
The applications do not have to go through an extensive review before they can be distributed to Android-powered devices, a contrast from the control that Apple holds over its hot-selling iPhone.
Until now, Google has been content to let other companies design the devices relying on Android.
Upsetting the Apple cart
The launch of the Nexus One comes as Electronic Frontier Foundation (EFF), a digital rights advocacy group, asked the US Copyright Office to allow owners of Apple's iPhone to use it with applications other than those available from Apple's iTunes applications store.
The iPhone is currently designed with restrictions that prevent owners from running applications obtained from sources other than the company's proprietary store.
A ruling in favour of EFF would be a huge financial blow to Apple, which earns 30 per cent of every application sold from its iTunes store.
A decision is expected in the next few weeks.
Greg Joswiak, a vice-president at Apple, said: "This [the removal of restrictions] would severely limit our ability to continue what we are doing as well as innovate for the future."
Barry Fox, a technology analyst, said that the end of Apple's monopoly over the iPhone technology might have mixed repercussions for the user.
"To Apple, this means it would lose some of the money it gets. To the consumer it means they would be able to get an Apple application - a little programme - from anywhere without paying Apple," he told Al Jazeera from London.
"But it would also mean that they would lose the guarantee they get at the moment that their iPhone really will run the application properly, that it will work properly, and will not be contaminated with viruses and malware."