The Mengtian module, which translates to 'dreaming of the heavens', launched on a Long March 5B rocket from the Wenchang Satellite Launch Centre and was able to dock with the space station about 13 hours later.
Astronauts Chen Dong, Liu Yang and Cai Xuhe have been on board the orbiting laboratory since June for a six-month mission to complete the construction.
Tiangong is about one-fifth of the size of the International Space Station (ISS) and is able to accommodate three astronauts, or six people during a short handover.
The T-shaped station now includes the Tianhe core module and two laboratory modules including the Wentian and Mentian.
An uncrewed Tianzhou cargo craft is scheduled to dock with the station next month and another crewed mission is expected in December to finish off the final phase of construction.
China has previously said that it is open to hosting astronauts from other countries on its space station.
The country has ambitions to become a leading space power, with a thriving sector that includes human flights to its new space station, planetary, lunar and deep-space exploration, a satellite navigation system and the continued development of its space transport system.
From 2016 to December 2021, China completed 207 launch missions, including 183 by the Long March carrier rocket series.
China has already landed a spacecraft on the Moon and Mars.
It will launch the UAE's Rashid 2 rover on its Chang'e-7 lunar landing mission to the lunar south pole in 2026.
Plans for the International Lunar Research Station — an enormous research station on the Moon by China and Russia — are also under way.
The proposal involves sending several Chinese and Russian missions to the Moon over a 15-year period from 2021 to 2036.
Officials said international partners would be required to make the project more cost-effective and boost the speed of research.