The former England captain, now a BBC pundit, joined the club in 1996 for a then-record breaking £15m and went on to score 206 goals in 10 years, before becoming manager in 2009.
Alan Shearer started his professional career at Southampton in 1988 before moving to Blackburn Rovers and then Newcastle United in 1996
He made 559 first team appearances for the three clubs, scoring 283 goals
He got his first England cap in 1992
He went on to make 62 further appearances, scoring 30 goals
After his retirement in 2006 he turned down the offer of a coaching role with the England squad
In April 2009 Shearer was unveiled as Newcastle United manager, but he failed to prevent the club being relegated
Mr Shepherd said the statue would honour the striker’s “unique career”.
He said: “It is now 10 years since he retired and our family decided that fans shouldn’t have to wait any longer for his unique career to be properly recognised.”
Former Newcastle boss Kevin Keegan, Mr Shepherd’s predecessor Sir John Hall, current managing director Lee Charnley and one-time team-mates Rob Lee and Steve Harper were among the guests as Shearer formally unveiled the statue, which is sited on Barrack Road outside St James’ Park.
Current Newcastle manager Rafael Benitez, who was unable to attend the ceremony due to a training session, said: “Alan was an incredible player, the perfect number nine, and he had a fantastic career representing this great club.
“He is also a great ambassador for Newcastle with the charity work he does to support the people of the city.
“The statue of him at St James’ Park is a perfect tribute to a true club legend and I send Alan my very best wishes for a memorable day.”
Former Blackburn Rovers and Southampton star Shearer scored 148 goals in 303 games for Newcastle – although won no silverware with the club.
Northumberland artist Tom Maley spent almost six months casting the structure.