Payne broke new ground in stunning fashion in 2015, steering 100-1 roughie Prince Of Penzance to one of the biggest upsets in the history of Australia's greatest race.
The 40-year-old hopes her new likeness at Flemington - crafted by artist Judith Leman and unveiled on Thursday - can inspire the masses.
"My life changed in 2015 when I won the Melbourne Cup and it has been the most amazing journey since," Payne said.
"To now have a statue here at Flemington is truly extraordinary. It feels very surreal.
"As a young girl, the Melbourne Cup was the race I dreamed of winning and knowing that dream came true fills me with immense pride.
"My hope is that everyone who views this statue feels encouraged to chase their dreams and ambitions, no matter how big they are."
Victoria Racing Club chairman Neil Wilson said Payne's legacy extends well beyond her accomplishments on the racetrack.
"Michelle is an inspiration to countless Australians and a powerful ambassador for female participation and the sport of horse racing," Wilson said.
"We are proud to recognise Michelle's achievements and her rightful place amongst some of the legends of our sport."
Payne's Cup-winning feat was matched last year when Jamie Melham became the second female jockey to win the race that stops a nation, aboard Half Yours.
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