"The first prisoners have arrived," Karl Hillesland, the new Norwegian head of Norgerhaven prison in the northern Netherlands, told news agency AFP.
Due to lack of space, more than 1,000 convicts in Norway are waiting to be placed in prisons, where they are often assigned to individual cells.
To resolve the problem, Norway has leased Norgerhaven prison from the Dutch government, and the first 25 prisoners were transferred there on Tuesday, ahead of a formal handover ceremony between the two countries on Wednesday.
But the move has angered Dutch inmates already serving their sentences there, who were transferred to another jail despite fighting to stay put in their "luxurious cells", as the Dutch media have described them.
Inmates at Norgerhaven serving long sentences can plant vegetables in the garden, raise chickens, cook and enjoy the pastoral surroundings from their cells.
"It's a very cushy prison, a pleasant prison," Kenneth Vimme, who is serving a 17-year sentence for murder and who volunteered for a transfer, told Norwegian public television NRK.
But he complained that fewer television channels would be offered to inmates, and was dismayed that not all prisoners were going of their own free will, which he feared could cause tensions.
Of the 112 prisoners being transferred in a first phase, 79 were volunteers. The others were being moved against their will.
Norgerhaven will eventually host 242 prisoners from Norway.
An association representing the families of inmates has protested against the transfer abroad, criticising the way in which it was done and claiming it violates the country's "proximity principle", which gives inmates the right to serve their time near their home.
"To serve your sentence so far from home hurts your chances of rehabilitation in society and the possibility of family visits," association head Hanne Hamsund, told AFP.
"With the trip and a night at a hotel, it will cost about 5,000 kroner (530 euros/$600) per person to visit a family member," she said, complaining of the lack of financial assistance from the Norwegian state.
The government, including the populist Progress Party which has promised to bring down crime rates, said that the plan excludes inmates who regularly receive visits from children.
"The proximity principle is a good idea but with the capacity problems we have been facing for years, we are already struggling to follow it," state secretary Vidar Brein-Karlsen from the Ministry of Justice told AFP.
"The Netherlands is not necessarily farther away than the alternatives that exist here in Norway," he argued. "You can come from Oslo but still have to serve your sentence in Bergen, Trondheim or even Tromso," all of which are hundreds of kilometres (miles) away from the capital, he said.
The agreement is for up to five years, during which time Norway hopes to refurbish some of its oldest prisons and build new ones to increase capacity.
The inmates will serve their sentences under the Norwegian penal system, which has a reputation for being liberal, and under the responsibility of a Norwegian prison director, but the rest of the staff will be Dutch. They will return to Norway before their release.
Dutch authorities estimate that about 700 prison cells will become vacant over the next five years. The country already hosts 550 Belgian inmates under a 2010 agreement at the Tilburg prison near the Belgian border.