The dragon's piercing yellow eye blinks at travellers smoke is exhaled from his huge nostrils.
The installation was unveiled ahead of next month's premiere of the last in the Hobbit trilogy The Battle of the Five Armies.
"Of all the things that we wanted to celebrate the third film of our final installation at the Wellington Airport, it had to be Smaug," Sir Richard said.
It took about three and a half to four months by up to 40 Weta staff members to create, he said.
"Anything like this takes a lot of time. Milled off the original digital model then hand sculptured in plaster moulded cast, the animatronic eye made and painted [and] the rock has to be made and installed."
The dragon breaks down into 14 parts in order to ship it, Sir Richard said.
"For me, Smaug is the ultimate creation of Tolkien's imagination and having a chance to bring this creation into Wellington Airport, along with the other characters we have done, was an opportunity not to be missed."
One of the Hobbit fans who had won a place in the competition, Tanya Bradna a 29-year-old events manager from San Diego, was blown away by the dragon.
"I want to take it home with me," she said.
"This is unreal, you guys have the coolest airport I've ever been to."
The competition winners had travelled around the country visiting Hobbit sites, including Hobbiton near Matamata, where some of the dwarves in the movie greeted them.
"They have just unravelled surprises every single day along the way. I don't know how our hearts can contain much more."
Ms Bradna has marked trip with getting a tattoo on her arm in Queenstown of an elvish poem written by Gandalf in the Lord of the Rings trilogy.
It read "Not all those who wander are lost".
Key Smaug facts:
• 4.25m from nose to head
• 2.92m high
• 2.5m wide
• 75 per cent the size of the dragon in the Hobbit movies.
