The solid bronze statue was put in place on Wednesday and replaced a smaller stone structure which had been decapitated in 2005.
The statue in Fairview Park shows Russell, who died on board a German U-boat in 1940, dressed in a trench coat and hat.
It was commissioned by the National Graves Association.
When the statue was damaged beyond repair four years ago there were demands that it be replaced by a monument of a less divisive figure.
However, National Graves Association chairman Sean Whelan said: “Sean Russell fought in the 1916 rebellion, the war of independence and the civil war. He became a senior republican figure and eventually IRA chief of staff in the 1930s. He went to Germany, the Soviet Union and the US seeking arms. If people want to call him a fascist they would also have to claim he was a communist.”
Local Fine Gael councillor Naoise Ó Muiri said the statue should have been replaced with one of the late actress Maureen Potter.
“This statue is in a different form and as such may have needed planning permission, this is something that I will be looking into.”