The seven-foot structure, which cost around 5,000, was built as a permanent tribute to the history of Juniper Green.
Residents came up with the idea after the village celebrated its tercentenary in 2007. But their research found that the village was in fact much older, as Bronze Age skeletons had been discovered there. The rectangular monument features carvings of a water wheel, a pot, a skull and a juniper branch, representing aspects of its history.
Val Hawkins, who lives in Juniper Green and helped to organise the anniversary celebrations, said: "The first mention of Juniper Green in writing was in the Colinton Kirk Session records in 1707.
"The interesting thing that came out of the tercentenary was realising through our research that Juniper Green was much older than 300 years, because in the mid to late 19th century, archaeologists found the remains of a Bronze Age skeleton here. The skull is now in the National Museum of Scotland, although it's not on display.
"Two or three Bronze Age beakers were also found in the 19th century in one of the gardens in Woodhall Terrace, which is very close to where the monument is going to be – this was one of the reasons why the location was chosen, so people have been living in Juniper Green since the Bronze Age at least, which was more than 4,000 years ago."
The monument is situated on the grass area at the crossroads of Baberton Avenue, Belmont Road and Woodhall Terrace.
"It was funded by the Juniper Green 300 steering group and Juniper Green Village Association, and was carved out of the Westmorland slate by sculptor and stonemason Ian Newton, of Nine Mile Burn.
Mrs Hawkins, who is a member of the steering group, added: "The monument will bring so much interest and meaning into the community here because it makes people think of the bigger picture, the history of the place and who lived here before. It enriches people's understanding of where they are living."
Piper Christopher Grieve played at the ceremony on Sunday afternoon, while Bronze Age expert Dr Alison Sheridan, of the National Museum of Scotland, gave a short speech on the village's history.
The monument was unveiled by the village's two oldest residents, George Turnbull and June Hannah, and the two youngest children at Juniper Green Primary School, Ben Scyner and Lily Nicol.
Professor Cliff Beevers, one of the organisers, said: "The ceremony went very well. There were about 200 people there. It was wonderful to have so many local people pooling their talents."