The embassy was reopened in the city's Banani area.
“It's a momentous and joyous moment. It's not just a diplomatic gesture. It's an emotional moment," Bangladesh Minister Shahriar Alam was quoted as saying by UNB.
In 1978, the embassy was shut down in the South Asian country by the military junta that ruled Argentina during that period.
Diplomatic operations, such as visas in order to travel, have since been handled by the embassy in neighbouring India, reports UNB.