This statue, which is being constructed at a cost of Rs. 2,074 crore, will be twice the size of the Statue of Liberty in the United States.
Bharatiya Janata Party (BJP) veteran Lal Krishna Advani, who represents Gujarat in the Lok Sabha, is the chief guest on the occasion.
The statue is to be built on an island called Sadhu Bet on the river Narmada in Gujarat, the home state of both Sardar Patel and Modi.
The inauguration has been preceded by a war of words between the BJP and Congress over Sardar Patel's legacy.
Earlier on Tuesday, Prime Minister Dr. Manmohan Singh and Modi were locked in an ideological battle over Sardar Patel.
Modi wished that the 'Iron Man' had been India's first prime minister and Dr. Singh underlining that Patel was a Congress leader and secular to the core.
In a veiled attack on Jawaharlal Nehru, Modi said on Tuesday the country's destiny would have been different if Sardar Patel had become the country's first Prime Minister.
Modi, who shared the dais with the Prime Minister in Ahmedabad, credited Patel with uniting the country after Independence.
"That unity and integrity of the country today is under threat from all fronts, be it terrorism or Maoism," he said.
The BJP's prime ministerial candidate, while citing the example of Punjab, said that those resorting to violence would not succeed in the country of Mahatma Gandhi and Patel.
"I want to tell the misguided youth who resort to bombs and guns that they cannot succeed in the land of Gandhi and Sardar (Patel). They cause harm to the country. But the biggest harm is caused to their own communities," he said.
Modi said Patel was a 'visionary' who could think about reservation for women way back in 1919.
The Prime Minister went next, stressing that Sardar Patel was a Congressman and committed to secularism.
Dr. Singh said that Sardar Patel and other leaders from his era believed in values like the unity of India and a secular outlook.
"I am sure those present here today will agree that there is a dearth of these values today," he said.
Information and Broadcasting Minister Manish Tewari had earlier this week accused the Bharatiya Janata Party (BJP) and the Rashtriya Swayam Sewak Sangh (RSS) of appropriating the legacy of India's first Home Minister.
"On 9/11/1948, Sardar Patel wrote a letter to Golwalkarji. And, in that letter, he said that the communal poison which had been spread by the RSS was responsible for the sacrifice of Gandhiji. As a student of political history, it has always intrigued me that the RSS, BJP has been attempting unsuccessfully to appropriate the legacy of Sardar Patel," Tewari told media here.
"I wanted to ask the BJP or their newly-anointed pretender that do they endorse, or agree with the views of Sardar Patel with regard to the RSS. If not, as the chief minister of Gujarat and possibly as the 'Swayamsevak' within history bears testimony to the fact that those who do not have a history of their own, try to appropriate the history of others," he added.
--ANI (Posted on 31-10-2013)