Dimple and Twinkle had moist eyes as they stood next to the reverred actor's statue, which will be placed at the Walk of the Stars at the Bandra Bandstand Promenade here.
The statue is made of brass and signifies an iconic pose from Rajesh Khanna's "Anand". It features him holding a bunch of balloons. It will be installed along with statues of icons like Yash Chopra, Raj Kapoor, Dev Anand and Shammi Kapoor.
Praising the statue, Akshay said: "It is a nice statue. It means freedom and happiness...the balloons signify that one should always be free in life."
Dimple thanked everyone for "gracing" the event in honour of "Kakaji", as Rajesh Khanna was lovingly called.
"I feel honoured to have known him and for being the mother of his two children," Dimple said while addressing a press conference here.
"Kakaji was an enigma. He lived and died on his own terms. His contribition to cinema was unparalleled. He was a superstar. His courage, bravery and fearlessness even in the time of death can't be forgotten. He was Anand and he lived like Anand. Life with him was like a rollercoaster," she added.
Akshay read out a note penned by his son Aarav for the event.
"My son has written something and I want to read it out. He was very close to him (his grandfather)," he said.
The note read: "I remember 10 days before my nana passed away, he was in bed. He had forgotten everyone, but remembered me. I don't know what happened to him and I still don't know. I know that he was great and still stays next to me."
Akshay said the unveiling of the statue was not just an important event for the family, but for everyone who knew the superstar, who breathed his last on July 18, 2012 following prolonged illness. He was 69.
"It is not only a great moment for the family but for everyone. It is a big thing that the statue will be placed with lot of actors like Shammi Kapoor and Raj Kapoor," he said.
Twinkle said it was a "sentimental" moment, and that her father "is there in my heart".
At the event, an audio-visual based on Rajesh Khanna's work in films over five decades of his association was shown too.
Other guests present at the unveiling included Asha Parekh, Mithun Chakraborty, Rakesh Roshan, Farhan Akhtar, Jeetendra, Anju Mahendru, Zoya Akhtar, Randhir Kapoor, Rishi Kapoor, Jackie Shroff, Poonam Sinha, Hema Malini and Zeenat Aman.
Veteran actress Hema Malini said: "It is nice that they are honouring actors for their contribution. He was my colleague and we had a good time working together. I worked with him in good films, he was a good friend."