The controversial portrait was banished from Liverpool town hall because it didn't bear a decent likeness to the monarch, with an unusually long neck.
Council chiefs ordered the artwork to be hidden away from public view in the vaults.
John Napper was commissioned to paint the portrait in 1952 for the Queen's coronation. The painting will now be displayed at Liverpool's St George's Hall to mark its 60th anniversary.
The artist described it as "a beautiful painting of a queen, but not this Queen".
Liverpool's deputy Lord Mayor Gary Millar, a trustee of the hall, said: "We are very proud that Liverpool now has the original first painting hanging in St George's Hall, which has been rehung to celebrate the anniversary of the Queen's coronation.
"It will be the first thing people will see if they come to get married or have a civil partnership or attend a citizenship ceremony."
Napper eventually painted a second portrait with a smaller neck, and is still hung in the town hall today.
Millar added: "It strengthens the link between the city's two civic buildings. The second version of the John Napper painting is hanging in the town hall and we have the original here.
"It is an honour for us to work with the friends of the hall, the staff there and the city council to rehang this beautiful painting."
The painting was unveiled days after the Duchess of Cambridge's first official portrait by Paul Emsley, which also received mixed reviews.
John Napper's widow Pauline said: "I remember the painting well. He was disappointed with the angle at which he painted it. He only had one sitting.
"It was due to be hung up high so that you would look at it from below. If you looked at it from that angle it looked normal. Then when they showed it they didn't put it up high and then it didn't look like the Queen.
She added: "It is a beautiful painting, obviously he would have been pleased that it is going on display. I am pleased too, it is a beautiful portrait."
Napper died in 2001 aged 84, and also painted the portraits of Lady Churchill in the 1950s and Prince Charles in 1996.