The contemporaneous detection of gravitational waves and gamma rays from GW170817/GRB 170817A, followed by kilonova emission a day after, confirmed compact binary neutron star mergers as progenitors of short-duration gamma-ray bursts (GRBs) and cosmic sources of heavy r-process nuclei. However, the nature (and life span) of the merger remnant and the energy reservoir powering these bright gamma-ray flashes remains debated, while the first minutes after the merger are unexplored at optical wavelengths. Here, we report the earliest discovery of bright thermal optical emission associated with short GRB 180618A with extended gamma-ray emission—with ultraviolet and optical multicolor observations starting as soon as 1.4 minutes post-burst. The spectrum is consistent with a fast-fading afterglow and emerging thermal optical emission 15 minutes post-burst, which fades abruptly and chromatically (flux density Fν ∝ t−α, α = 4.6 ± 0.3) just 35 minutes after the GRB. Our observations from gamma rays to optical wavelengths are consistent with a hot nebula expanding at relativistic speeds, powered by the plasma winds from a newborn, rapidly spinning and highly magnetized neutron star (i.e., a millisecond magnetar), whose rotational energy is released at a rate Lth ∝ t−(2.22±0.14) to reheat the unbound merger-remnant material. These results suggest that such neutron stars can survive the collapse to a black hole on timescales much larger than a few hundred milliseconds after the merger and power the GRB itself through accretion. Bright thermal optical counterparts to binary merger gravitational wave sources may be common in future wide-field fast-cadence sky surveys.