The carving welcomes visitors to a new teaching clinic, which was also opened at the school.
Dr Jim Williams, a senior lecturer at Te Tumu, the university's School of Maori, Pacific and Indigenous Studies, and a Ngai Tahu kaumatua, formally blessed the pounamu (greenstone) and carving by Shayne Baxter, an assistant lecturer and specialist carver at Te Tumu.
The pounamu and the carving were a tangible sign to Maori students and physiotherapy patients that the school was "Maori-friendly" and respectful of Maori values, Dr Miller said.
The pounamu and carving were named Arataiki, reflecting the pounamu's origins in the Arahua Valley area of the West Coast, and a Maori legend in which Waitaiki, the errant wife of Tamaahua, was turned into greenstone in the area, school officials said.
The name also reflected the concept of ara, meaning a pathway through land or water.
The pounamu symbolised "supporting a pathway forward" for physiotherapy students, the physiotherapy profession, and for Maori principles and values, officials said.
Physiotherapy dean Prof David Baxter said the clinic had recently been established in a former garage area at the school building in Great King St.
The physiotherapy school, whose origins could be traced back to the School of Massage, established at the University of Otago in 1913, was a key national provider of physiotherapy education.
The carving provided to accompany the pounamu was "absolutely incredible" and reflected the school's distinctively New Zealand character, Prof Baxter said in an interview.
The pounamu was provided by Stephan Milosavljevic, an Otago senior lecturer in physiotherapy, who was given the pounamu by a West Coast family in the 1970s.