Sunday coincided with the coup’s first anniversary, when the public poured onto the streets in solidarity with the administration, and chanted, "We are soldiers of Tayyip."
He has been trying to portray himself as the country’s ultimate savior, and has ordered a sweeping crackdown on suspected plotters, which has seen authorities rounding up 50,000 people and sacking over 100,000 more.
Erdogan started marking the event on Saturday which dragged into early Sunday, attending a special session of the Parliament in Ankara, speaking to a mass rally in Istanbul, and then flying back to the capital for a rally outside the legislature and a special event at the presidential palace, which featured the unveiling ceremony.
Some 250 people were killed and the Parliament was bombed before the coup was put down.
The statue comprised a giant plinth topped by figures holding the star and crescent, which is featured on the Turkish flag. The pedestal is etched with the names of the victims.
Erdogan addressed the demonstrators, saying the country would "chop off the heads" of traitors in reference to his intentions to reintroduce the death penalty. Some demonstrators brandished nooses in a symbol of their support for the punishment.
The president said the suspects being tried had to wear uniform clothing like the notorious orange jumpsuits used at the infamous US military prison at Guantanamo Bay in Cuba.
He also announced that a decision would be made on Monday over whether to recommend extending the country’s state of emergency, which was first announced after the coup went underway.
EU: Turkey falling short in democracy
European Commission chief Jean-Claude Juncker urged Turkey to uphold democratic values if it hoped to join the European Union.
"Whoever wants to join the European Union is joining a union of values," he wrote in an op-ed for German weekly Bild Sonntag.
The 27-nation bloc has been alarmed at the scale of the crackdown and Turkey’s inclination to reintroduce the capital punishment.
Nevertheless, Junker said, "Europe's hand remains outstretched."
"Turkey too should clearly show its European colors and emphatically take basic European values to heart."