The 46-year-old, who is the Premier League's record scorer with 260 goals, has been honoured by his former club with the 16-foot high statue.
Funded by former Newcastle United chairman Freddy Shepherd, the installation shows Shearer with his famous goal celebration.
"I'm very proud and honoured to be stood here with this statue, I'm in great company with Jackie Milburn and Sir Bobby only 20 yards away," he said.
"Never, ever did I think when I left home at 15 to go to Southampton to be a professional footballer that one day I would have a statue.
"I'm a very, very lucky guy. I scored goals, I was half decent at it, I would have done it if I didn't get paid and there's many coaches, players and staff at all the clubs I have been with that I have to thank and it's as much for those guys as it is for me."
Shearer signed for Newcastle in 1996 for £15m from Blackburn and netted 206 times for the club, while he also scored 30 goals in 63 appearances for England.
He was joined at the unveiling by his wife and three children as well as by former England and Magpies manager Kevin Keegan.
Shepherd said: "Alan was one of the greatest players ever to wear the Newcastle shirt. 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.
"We are proud and delighted to have been able to create a lasting monument to not only a great footballer, but also a fine man who has done so much for the communities in Newcastle through his charity work."