The first commercial tidal turbine was lowered into the Bay of Fundy on Thursday. (CBC)

A turbine that will test the potential of tidal power was installed in the Bay of Fundy off the Nova Scotia coast on Thursday afternoon.

It was placed in the Minas Passage, about 10 kilometres west of Parrsboro, N.S.

"Today is a great day in the history of Nova Scotia," Energy Minister Bill Estabrooks said in a statement.

"Tidal energy offers Nova Scotians many opportunities — new jobs, cleaner energy and the use of resources we have in our own backyard. That's the dream, and the tidal project team have dedicated themselves to help make it a reality."

The provincial government has contributed $9 million to the tidal power project.

The 400-tonne device was installed on the seabed by Nova Scotia Power and its partner, OpenHydro.

It took about 10 minutes to lower the six-storey-high device, which has a base built by Cherubini Metal Works in Dartmouth.

"Working with OpenHydro, we are proud to be the first to deploy and test a commercial-scale tidal turbine in the Bay of Fundy and look forward to the learnings ahead," said Rob Bennett, president and CEO of Nova Scotia Power.

The province has set a target of producing 25 per cent of its electricity from renewable resources by 2015.

Research suggests that tidal power in the Minas Passage could create up to 300 megawatts, enough to power 100,000 homes. If Thursday's turbine survives the winter storms, it has the potential to generate electricity for up to 500 homes once it's connected to the power grid.

Minas Basin Pulp and Power and B.C.-based Clean Current have also been chosen to test turbines in the Bay of Fundy. They are aiming to deploy their devices next year.

With files from The Canadian Press