Tranquility and its attached Cupola were blasted into space earlier this week aboard the space shuttle Endeavour, on one of the shuttle's final visits to the space station.
Nasa, the US space agency, has plans for just four more shuttle flights before the three remaining shuttles in the fleet are retired from service.
Once in place Tranquility and its Cupola lookout will provide the station's crew with breathtaking panoramic views back to Earth and out into space.
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The domed lookout is made up of nine windows, including the largest window deployed in space measuring 80cm in diameter.
Currently space station residents are restricted to just six far smaller portholes as their only visual connection with the cosmos outside.
A Nasa press release dubbed the window the space station's newest and best "eye-pod".
Each window pane on the lookout is made of specially toughened glass and has a petal-like cover that will protect the windows from collisions with micro-meteorites and other space debris.
Inside the Cupola dome computer workstations will give astronauts full control over the space station's robotic arm, as well as providing opportunities for Earth observation studies better than any satellite can provide.
But aside from use in scientific observations, spacecraft docking and station maintenance work, Nasa says the lookout will also serve as an important psychological connection with Earth for crews aboard the space station, and provide a space for them to unwind.
"Crews tell us that Earth gazing is important to them," said Julie Robinson, the ISS Program Scientist at Nasa's Johnson Space Centre.
"The astronauts work hard up there and are away from their families for a long time. Observing the Earth and the stars helps relax and inspire them."