The Huer's Hut on Towan Head, Newquay, was built in the 19th Century as a shelter for fish-spotters called huers.
The huer would shout "heva heva" ("here they are") to alert the fishermen in Newquay Harbour.
The Grade 2* listed building has been restored after residents set up a campaign group to help raise funds for its repair.
Peter Hicks, from The Old Cornwall Society, said: "The huers were watching for signs of pilchards in the bay. They would notice a change in the colour of the water to a dark reddish brown.
"They would see seagulls diving in, catching fish.
"It was important job because pilchards came through the bay quite quickly."
The huer would use a trumpet-type instrument and wave gorse or heather to alert the fishermen.
At its height, millions of pilchards were exported from Cornwall before a decline in numbers.
Mr Hicks said: "Huer comes from the same derivation as hue and cry when the people of a town or village would see a thief and raise a hue and cry and chase that person."
All the repairs have been carried out using original materials such as lime mortar.
Local councillor Geoff Brown said: "It is an iconic building and means a lot to people of Newquay. I'm really delighted they've done such a fantastic job of refurbishing it."
A Cornish landmark that is part of fishing history in the West Country has been restored at a cost of £30,000.