The memorial, unveiled by Defence Minister Marise Payne, sits adjacent to Defence Site Maribyrnong.
Minister Payne said she was honoured to recognise the service of ‘Sandy’ the Light Horse and the Australian Light Horse Brigades.
"This memorial will serve as a reminder to future generations of the important role light horses have played in Australia’s military history," Minister Payne said.
"This memorial honours the contributions of the Light Horse Brigades that served in World War I. Australia’s light horses, including Sandy, were deployed from the remount depot at Defence Site Maribyrnong."
Sandy belonged to Major General Sir William Bridges KCB, CMG, who died in battle at Gallipoli, and was the only horse to return to Australia following service in World War I.
"The memorial has been brought to fruition by the Australian government, through the committed ‘Friends of Sandy and the Australian Light Horses’, and the Maribyrnong City Council," Minister Payne said.
The memorial is located adjacent to the Randall Street Community Centre, on land that has been made available for public access by Defence and Maribyrnong City Council.
Following the sale and redevelopment of Defence Site Maribyrnong, the memorial will be relocated to its permanent location at the Fisher Stables.
The memorial was unveiled on the eve of the centennial anniversary of the Battle of Beersheba where four of Australia’s Light Horse Brigades played a pivotal role.
The Battle of Beersheba on 31 October 1917 was part of the wider British offensive known as the third Battle of Gaza, leading to the capture of the town of Be’er-Sheva.
Chief of Army, Lieutenant General Angus Campbell said the Battle of Beersheba was significant to WWI as it enabled the British Empire forces to break the Ottoman line and advance into Palestine.
"The 4th and 12th Light Horse Regiments of the 4th Light Horse Brigade famously charged the town of Be’er-Sheva across open ground against enemy forces," LTGEN Campbell said.
"The New Zealand Army also made a significant contribution, fighting for almost 24 hours to secure the high ground of Tel el Saba, which overlooked the approach.
"Without support from the New Zealand Army the charge would have been decimated.
"With the backdrop of significant losses in Gallipoli and the Western Front, the Battle of Beersheba saw comparatively few casualties – the courage and desperation of the Light Horsemen saw them triumph in a daring charge that forever earned them a place in Australia’s history."
LTGEN Campbell said the men and women of the Australian Army today carry with them the Light Horse legacy.
“The cavalry soldiers of the modern Army carry the values and professionalism of the men who served a century ago,” LTGEN Campbell said.
"Today's soldiers share the same commitment to their mates and desire to look after their steed – today’s armoured vehicles – as their forebears did 100 years ago."