The 13 metre-long sea creature lies in the port of Noto, where flying squid is the town's delicacy.
It reportedly used 25 million yen (NZ$320,300) of the emergency funding to build the statue.
Noto officials have told local media it is part of a long term plan to lure tourists back after the pandemic.
Japan is battling another surge in coronavirus cases, and Tokyo is currently under a state of emergency - the third for the country since the pandemic began.