The sculpture was unveiled during a ceremony marking the 490th anniversary of the city's founding.
Pizarro founded Lima in 1535 after defeating the Inca Empire and claiming their lands for the Spanish crown.
Indigenous leaders say he was a mass murderer who destroyed their culture, while those who supported the statue's return said Peru should not erase its history.
The monument, which shows Pizarro on horseback with his sword drawn, was created by the American sculptor Charles Rumsey and offered by his widow to commemorate the city's fourth centenary in 1935.
A statue of the Spanish conquistador Francisco Pizarro has been reinstalled in the centre of Lima, the capital of Peru, more than 20 years after it had been removed.
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