The New York centre will mark the first time that Facebook has created a software base that is not on the US West Coast. It will join a Facebook advertising team already in New York.
At a press conference in New York attended by various dignitaries, including the city's mayor Michael Bloomberg, Facebook's chief operating officer Sheryl Sandberg said that this was a "big step" for the firm.
"We are trying to grow at a clip that will allow us to get the very best people and integrate them," she said.
"We will be adding thousands of employees in the next year."
Bloomberg hopes to transform New York into a technology hub to rival Silicon Valley, with the likes of Etsy, Foursquare, Gilt, Tumblr and Spotify all having chosen the Big Apple for their base.
He said today: "Facebook is capitalising on what more and more tech companies are realising: that New York City is the best place in the world to recruit and retain a talented workforce.
"We're well on our way to achieving our goal, and that is to become the world's number one hub for information technology and social media."
Mark Zuckerberg opted to leave Boston and move to Silicon Valley when he created Facebook, but last month he revealed his regret over the move, describing the West Coast technology mecca as "a little short-term focused".
Facebook's New York office will be headed up by Serkan Piantino, who previously led the engineering team behind Facebook's News Feed. He has also worked on the new Timeline profile feature.
> Facebook's Timeline profile presented by Mad Men's Don Draper
CNN last week claimed that Facebook has acquired Texas-based Gowalla, the two-year old social network that enables users to check-in at locations and share pictures of their visits.
Members initially received virtual goods at certain check-in points, but the site struggled to compete with the market-leading Foursquare, leading it to refocus on offering social travel guides to 60 cities, including London, Chicago and Prague, using information posted by users.
CNN claimed that the company had been bought by Facebook for an undisclosed sum and its development team would now work on Timeline.
Neither Facebook nor Gowalla have confirmed the takeover.
Facebook already offers a location-based service, called Facebook Places, on its website and mobile apps, but it is thought that the site wants to offer a broader experience to users.
Speaking to the BBC, Dachis Group European managing director Lee Bryant said: "Facebook Places seems to work fairly well but they want to make a big play in this area.
"Location-based services are still in their early stages. Gowalla was interesting and slightly more story based than Foursquare, which Facebook may feel will help it strengthen its Timeline service."
Speculation is also rife that Facebook is preparing to float on the US stock market in the New Year, with reports suggesting that the social network could be valued at $100bn.