The event, which took place at State House, also witnessed the introduction of a D200 note.
The redesigned banknotes bear the portrait of President Jammeh and are smaller in size than the existing paper-based banknotes.
The D20 will replace the existing D25 banknote which will continue to be legal tender and will continue to circulate until it is fully withdrawn over time, the release stated.
The historic event held at State House formed part of activities marking the country`s Golden Jubilee.
In his statement, President Jammeh urged Gambians to take ownership of the new banknotes and handle them with care.
He called on the Gambian populace to familiarize themselves with the new banknotes, and help in ensuring their protection from counterfeiters.
He assured De La Rue, the firm that printed the country`s currency, of the government`s continued partnership.
The Governor of The Central Bank of The Gambia, Amadou Colley, said the redesigned banknotes have been produced using cutting edge technology.
The move, he said, is designed to enhance the security of the country’s currency for improved economic growth.
A representative of De La Rue, Tom Lee, explained that The Gambia is a year ahead of the Bank of England in introducing the polymer banknotes.