It was a delicate job to slip the 285-tonne vessel back into the water but the weather cooperated and the launch was a success.
The launch was touch and go for a while, as Saturday morning's weather called for 50 km/h winds.
The ship's lofty masts will be raised after the schooner is in the water.
Among the spectators Saturday was Charles Tanner, 92, who worked as a crewman on the orginal Bluenose schooner. He was also in Lunenburg for the 1963 launch of the Bluenose II.
"I thought it was a nice thing to see," said Tanner.
The original Bluenose was famous for winning every race in 18 years of competition after its launch in 1921. It was built in Lunenburg in the same shipyard as the current renovation.
The schooner is featured on the Canadian dime.
Project sailed past deadlines
The Bluenose II was built in 1963 and transferred to the province in 1971 for just $1, saving it from being scrapped. The Nova Scotia government invested nearly $17 million to rebuild the ship.
But the restoration project has been delayed for over a year.
The Bluenose II was supposed to launch in early July, putting the boat in the water just in time for the busy tourist season, but more delays meant the schooner missed the province's tall ships festivals this year.
Premier Darrell Dexter was on hand for the launch,
"Today I think proves the nay sayers wrong," said Dexter.
"When you see the pride of place, when you see the extraordinary attachment of Nova Scotians and Canadians to this ship, to this part of our history, to this part of what it is to be Nova Scotian — that I think says the investment's worthwhile. The work that we did was well done... we have every right to be proud of this."
Thousands of people turned up to witness the launch.
The celebrations included musical entertainment and a fireworks display.