The 2m tall sandstone column commemorates the 1297 Battle of the Bell o’ the Brae, which was fought nearby.
Wallace and 300 followers routed an English garrison of around 1,000 men from Glasgow Castle, which was razed in the 18th century.
The new monument features a sculpted medieval helmet, Wallace’s sword and the story of the battle.
The Society of William Wallace has campaigned since 2009 for the site to be marked.
Glasgow Castle was completely destroyed in the late 18th century to make way for the Glasgow Royal Infirmary, which opened in 1794.