The statue, which is connected to Staple Center and suspended 10 feet off the ground, was brought to downtown Los Angeles on Thursday prior to the unveiling ceremony.
The ceremony at Star Plaza outside Staples Center included live music, a Ferris wheel, interactive games as well as speeches from O'Neal himself and his teammates, colleagues and friends. Kobe Bryant, Phil Jackson, Jerry West, Kareem Abdul-Jabbar and Kobe Bryant spoke at the event.
"I just want to say thank you. I've learned so much from you as a player. Everything you've done for this city, everything you've done for this franchise," Bryant said. "Kids, your kids, you guys should know your dad was a bad man. Congratulations and much love to you, my brother."
A few of O'Neal's six children also spoke during the ceremony and helped him unveil the massive statue hanging above the ground. O'Neal thanked Jerry West, his former teammates and, of course, the fans for believing in him throughout his career.
"This moment is very unexpected because I see two Lakers ahead of me that definitely deserve this statue," he said. "To the fans, you know I love you, and I just wanted you to know that I heard you in the games when I was missing free throws."
At the end of his speech, he chanted, "Can you dig it?" to a cheerful crowd.
O'Neal played for the Lakers from 1996 to 2004, leading the team to three consecutive NBA championships and winning the NBA finals MVP award each time.
The Lakers are hosting the Minnesota Timberwolves at 7:30 p.m.