Roo Watch, designed by Western Australian artist April Pine, is a contemporary take on Hermann Hohauss' bronze kangaroo sculpture, which was stolen from the former Downer Primary School site in 2013.

The Downer community association had been working for years with the ACT government to revamp the local shops, put in a new garden, and add extra amenities. The sculpture signalled the suburb's upgrade was complete.

"This is a really happy day for the Downer community," the association's president, Miles Boak, said.

"[The sculpture's unveiling] is the culmination of a lot of things happening to upgrade the square, which has been a long-held wish for the residents and to see it happen today was just great.

"It's going to be a landmark for the suburb and I can see kids and the community really enjoying it in our square into the future."

Downer residents had been devastated by the theft of Hermann Hohauss' original sculpture, they said, as it had been an "iconic" part of the suburb slated for relocation to the square a month before it was stolen.

Arts ACT had no record of the sculpture on its public art register since it was commissioned prior to self-government and could offer no estimate of its value.

"The revitalisation of Downer village square has been really important for the community and it's just wonderful to see that work completed with the installation of the Roo Watch sculpture," minister for urban renewal Rachel Stephen-Smith said.

"I really want to thank the Downer Community Association for all the work they've done with the government to deliver something that is really by the community and for the community."

The Downer Primary School was closed in 1988, rented out as an office space afterwards, and demolished in 2014. The site is slated for 37 townhouses and 123 apartments - a project that the Downer community association said they had been well consulted with about.

Last month though, some residents raised concerns that the suburb would be swamped with high-density housing under an ACT government planning strategy.

More than 100 residents packed a community association meeting that resolved to start developing an alternative Downer masterplan focused on modest infill and upgrades to parks, playgrounds and other "social infrastructure".

"An incredible stress will be brought into people's lives with the fear of huge, inappropriate developments next to your place, and people knocking on your door asking you sell [your property]," one resident said.

With Dan Jervis-Bardy