The bust was in good condition and depicts Hermes at “a mature age”, according to the Greek culture ministry, in contrast to his usual depictions as a young man.
The head is in the style of famed Greek sculpture Alcamenes, who flourished in the second half of the fifth century BC, the ministry said.
While the bust once served as a road marker, it was eventually incorporated into the wall of a sewer.
The sculpture was found just 3ft beneath Agia Irini or St Irene Square in the capital.
“Unique Athens!” the mayor of Athens, Kostas Bakoyannis, wrote on Facebook. “Pride and admiration.”
The son of Zeus, Hermes was revered as the god of fertility, as well as being associated with the protection of livestock such as sheep and cattle.
In the Odyssey, he features as the messenger of the gods, who conducts the dead into the underworld of Hades.