John Taylor, born in 1822, was one of the first men to be awarded the Victoria Cross after a braving heavy fire to rescue a wounded soldier. He died in Woolwich, south east London, two hours after receiving the news of his medal. His widow was refused permission to receive the honour in his place.
The campaign to recognise Taylor as a war hero has been led by Mick Barnbrook, a Greenwich Parks Constabulary officer, who was told the tale by local people.
Mr Barnbrook traced the sailor's relatives in New Zealand, who gave permission for a headstone showing a Victoria Cross. Woolwich residents and the Royal Naval Association raised pounds 1,300 towards it.