Iraqi Cultural Minister Hassan Nazim accepted the tablet during a ceremony in Washington.
"To me, it means restituting self-esteem and the confidence in Iraqi society," he said.
Despite its small size, the ancient artifact has immense cultural and historical value. It contains portions of the "Epic of Gilgamesh," considered one of the oldest works of literature in human history, which tells the story of a powerful Mesopotamian king on a quest for immortality.
"It's a story which has influenced all the great monotheistic religions, leaving traces also on the Iliad and the Odyssey," said UNESCO Director General Audrey Azoulay, who called the tale a "treasure" for "our common humanity."
She added that the stone's return to its rightful home is "a major victory for the international community over those who mutilate heritage."
"Its repatriation itself is a tale of epic proportions," said US Assistant Attorney General Kenneth Polite.
The clay tablet, carved with cuneiform characters, is believed to have been stolen from an Iraqi museum in 1991, around the time of the first Gulf War.
It reappeared in Britain in 2001, according to Polite.
An American art dealer bought it from a London-based Jordanian family in 2003, before sending the piece to the United States without declaring its true nature to customs. It was then sold to antique dealers in 2007 for $50,000 under a false certificate of origin.
The tablet was sold once again in 2014 for $1.67 million to the owners of craft chain Hobby Lobby, the Green family, fundamentalist Christians who wanted to display the stone at their Museum of the Bible in Washington.
A museum curator became concerned about the tablet's origins in 2017, feeling that its documentation was incomplete. It was finally seized in 2019.
Iraq's Ministry of Culture called on other organizations to scrutinize artifacts of dubious provenance in an effort to uncover other missing treasures of antiquity.
"We invite all universities, museums, institutes (and) antiquities collectors to confront the illicit trafficking of artifacts to show more care and interest in restituting those which have been trafficked to the country of origin," the ministry said.
Some 17,000 antique artifacts were already returned to Iraq from the United States in July. The pieces mostly dated from the Sumerian period, some 4,000 years ago, one of the oldest civilizations in Mesopotamia.
Iraq has seen its historical artifacts looted for decades, including since the US invasion in 2003.
