The outdoor pool, called Penguins Rock, offers improved viewing areas for people visiting one of the zoo's most popular species.
For the penguins themselves, the attraction has mock sandy beaches and rocky areas, a waterfall feature, a water shoot and a diving board made out of carved rock.
The development also includes a "state-of-the-art" filtration system for the 1.2m litres of water it holds.
Colin Oulton, team leader for birds at the zoo, said: "The new enclosure is a wonderful addition to our visitor attraction and perfect for our penguins.
"The birds, both returning and new, have settled in very quickly to the Penguins Rock.
"In fact, breeding season will shortly be here and many of our returning birds are already claiming their favourite nesting spots."
Bosses said the existing pool had served the zoo's large colony of penguins well for more than 20 years but it was starting to need some work behind the scenes, so it made sense to combine it with a visual overhaul.
Darren McGarry, head of living collections, said the animals have been getting used to their refurbished enclosure in recent weeks.
"Our penguins have been reintroduced back into their home over the last few weeks, with the 28 gentoos and 27 rockhoppers that remained at Edinburgh Zoo going in first," he said.
"It was a pleasure to see the birds start to interact with the new features of their enclosure - trying out the water slide and sticking their beaks into their new waterfall. The waterfall has actually proved to be a real hit with the gentoos.
"Next, a week later, came gentoo birds that had been staying in Belfast and Denmark, and there was lots of calling out as birds definitely recognised old friends.
"As well as old faces returning, we also welcome a mix of new one and two-year-old gentoos to Edinburgh Zoo as it is important to keep genetic diversity within populations.
"We are really looking forward to see the reactions of our visitors as they see our new enclosure and see our famous black and white birds enjoy all its new features, the mock sandy beach, the clear aqua blue water and creative bird themed interpretation, to name just a few of exciting changes.
"However, it is the opportunity to feel so close to the birds due to the new lowered sightlines, and glass barriers and wood perimeters, that we particularly hope people will be thrilled with."
The new enclosure opens to the public on Thursday.