Relatives of Private Francis Fitzpatrick travelled to Glasgow from their homes in Ulster border town County Monaghan, and Belfast in Northern Ireland to attend the event.
They were joined at the graveside in St Kentigern's and at a civic reception by more than 40 guests from organisations including the Armed Forces, the Victoria Cross Trust and Poppy Scotland, as well as Monaghan County Council.
The headstone at the previously unmarked grave was unveiled by Lord Provost Sadie Docherty.
Mr Fitzpatrick, who was born in County Monaghan in 1859, served in the 94th Regiment of Foot in the Zulu and Basuto wars between 1877 and 1879.
On November 28, 1879, he was with Private Thomas Flawn and Lieutenant Dewar of the 1st Dragoon Guards.
Along with six local men, they were caught up in an attack on Sekukuni's Town in South Africa and the officer was badly wounded.
The group was chased by 30 of the enemy but the locals with them ran off.
The two privates carried Lieutenant Dewar to safety - saving his life.
In September the following year, Mr Fitzpatrick was awarded the Victoria Cross - the highest and most prestigious award for gallantry in the face of the enemy.
The war hero went on to serve in the First Boer War between 1880 and 1881.
He served in the Second Boer War from 1899 to 1902 after re-enlisting with the Argyll and Sutherland Highlanders.
Mr Fitzpatrick married Ester around 1894 and lived and worked in Glasgow until his death in 1933 at the age of around 74.
Joe Hennessy, great nephew of Francis's wife Esther, said the event was the culmination of 40 years of research.
"I visited the National Army Museum in London six years ago and that was when I found out Francis was buried in an unmarked grave in Glasgow.
"I contacted the council and they not only agreed to get involved but have also funded the gravestone which was wonderful news."