Minister for Commonwealth Games and Sport Shona Robison MSP officially opened the revamped facility.
Sportscotland contributed a grant of over £121,000 towards the £320,000 cost of the works.
The development included upgrading the track, floodlights and fencing.
Minister Robison said: "Track cycling was, without doubt, one of the highlights of this year’s Olympics and I’m pleased to see this excellent resource in promoting physical activity and leave a lasting legacy that can be enjoyed for years to come."
City Council environment convener Councillor Craig Melville said: "This work has transformed the velodrome and I am delighted that local cycling has received such a significant boost.
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"We are also grateful to sportscotland for their funding assistance in this major project. I would also like to thank the Discovery Junior Cycling club for all their help."
He added: "The city council is investing in sporting facilities across Dundee, so that people can take part in a range of activities and stay fit and healthy.
"I am pleased that this facility will help to enhance Scotland’s growing reputation for cycling excellence in the lead-up to the Commonwealth Games."
Craig Burn, Chief Executive of Scottish Cycling, said: "This is a fantastic redevelopment of an existing cycling facility which is going to a great asset to not only to the local club, Discovery Juniors, but also for the cycling community. With access to a quality facility to provide track coaching, racing opportunities and will assist riders with getting on to the first steps of the performance pathway.
"As part of the on-going development of the sport at all levels we actively support activities with a facilities focus, such as projects like we see here taking place at Caird Park. Quality facilities are a major priority for cycling and are vital to the development of the sport."
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