The 12-metre-tall (40-foot) cage-like structure was made from polished steel and has a cut-out at its centre that depicts two intertwined human figures.
Appearing to break through the steel bars that surround them, these characters represent the "free passage of all populations, and appealing for a world without borders," said creative foundation Brilliant Minds, which organised the installation.
The organisation recently installed Arch outside the Nationalmuseum national gallery on the Blasieholmen peninsula in Stockholm's archipelago.
The sculpture, which was first shown in New York in 2017 as part of the Good Fences Make Good Neighbours installation, is the first in a series of "cultural exhibits" that Brilliant Minds will support in Stockholm over the next five years.
It will remain in place for a year, after which Arch will be moved to an as-yet-undisclosed permanent site in the city.
Brilliant Minds, which was established in 2015 by Spotify founder Daniel Ek and entrepreneur Ash Pournori, holds annual events in Stockholm that aim to support creative individuals and help them come together on "world-changing" ideas.
Ai was one of the speakers at this year's event, which took place in Stockholm in June.
"Now more than ever, as the world is spinning at its fastest and most challenging, we must broaden our minds, share our experiences, and work together to create a brighter future," Brilliant Minds CEO Annastasia Seebohm said.
"The aim of Brilliant Minds is to spark impassioned conversations, encourage questions, and seek answers, and the unveiling of Arch, and our new program of public cultural exhibits, will ensure we continue the important conversation for change," she added.
Ai is known for his political artworks, which also include a footprint flag designed as a symbol for human rights that was created to celebrate the 70th anniversary of the Universal Declaration of Human Rights.
The artist, who currently lives in Portugal, was arrested in China in 2011 and held for 81 days without charge, after which he was detained in the country until 2015.
He has since shown images of his Beijing studio being torn down by Chinese authorities. Recently, the artist designed a home extension with hexagonal ends for a weekend home in New York.
The photography is by Jean Lapin.