Some 22 million litas (6.37 million euros) were invested in the construction of the new factory and were shared by IKEA and Klaipedos Mediena, a statement from the Lithuanian company said.
The factory is expected to produce 40 million litas' worth of production in 2003, which is to increase up to 72 million litas the following year.
About 235 people are to be employed in the new factory.
IKEA under the agreement is to purchase all production of the new factory at fixed prices over the next five years.
The new factory is a first phase of IKEA and Klaipedos Mediena's joint 80 million litas project, which also provides for building another two furniture factories.
One facility is to be built in the southwestern town of Kazlu Ruda and another in Russia's Kaliningrad region.
The new plant was built on a designated site occupying 10,000 square meters in the territory of the Klaipeda-based company. The plant currently employs 40 people, but the number will rise to 235 as soon as it starts operating at full capacity.
In the first half of this year, Klaipedos Mediena sold production for 48.8 million litas, down by 3 percent on the same time last year.
In 2001, the company's turnover amounted to 101 million litas and its net profit came to 1.4 million litas.
Klaipedos Mediena is controlled by West Lithuanian Industry and Finance Corporation.