Called Luminaries, the interactive display consists of rows of custom-fabricated, box-shaped lanterns affixed to a steel support structure that has been painted black.
Each lantern is individually controlled in terms of colour, intensity and animation.
The interior is ringed by two levels of retail and a grand staircase that doubles as a seating area.
Described by Rockwell as "an ephemeral carpet," the lighting installation stretches nearly the full width of the atrium.
It rises upward as it approaches and covers the staircase.
"As you walk around, it is an installation that you see in 360 degrees, both in plan and in section," firm founder David Rockwell told Dezeen. "You can see it from above and below."
Rockwell said the installation embodies the firm's "deep interest in technology as a design tool".
In addition to the canopy overhead, the display features three white glowing cubes at ground level, called "wishing stations", which visitors are invited to touch while making a wish.
The colour and behaviour of the LEDs in the lanterns respond to each visitor's command.
"When you touch the station, it scrolls through colours until you see a colour you like and you release it. Then, that colour paints itself across the ceiling," Rockwell explained.
The installation also has five light shows choreographed by Rockwell that will play throughout the day and night. Each is about two and a half minutes in duration.
The installation opened 1 December and is on view through to January 2016.
The Winter Garden atrium, constructed in 1988, is the setting for a variety of public events. It is located within Brookfield Place, a business and shopping complex in the Battery Park City neighbourhood.
The complex, formerly called the World Financial Center, recently underwent a $250 million (£167 million) renovation.
The Rockwell lighting installation is intended to become a permanent holiday fixture.
The firm hopes it will evolve to become a landmark similar to the Christmas Tree at Rockefeller Center in Midtown Manhattan.
"Rockefeller Center has its monumental tree; Brookfield Place hopes to start a holiday tradition in the heart of Lower Manhattan's Battery Park City that is just as enduring – one built on the season's traditions of sharing, giving, community and light," said the firm.
Photography and video are by Arbuckle Industries.