Mr Lagos travelled on a special train to speak at an official ceremony in the poet's home town of Parral.
Pablo Neruda received the Nobel Prize for Literature in 1971.
A long-standing Communist Party supporter, he died less than two weeks after Gen Augusto Pinochet overthrew Salvador Allende's government in 1973.
His funeral became the first public show of opposition to Chile's military rulers and his work was banned until 1990 under the Pinochet regime.
President Lagos called on Chileans to keep Pablo Neruda in their hearts, so that he could continue to "speak to the world from Chile".
He described the poet as "a man who was always faithful to the ideals of change".
Earlier, Mr Lagos inaugurated a temporary artwork outside La Moneda presidential palace in the capital, Santiago - a 16m (52ft) wide heart made of red and green apples.
Many Chilean towns and cities have been staging poetry readings to mark Pablo Neruda's centenary, while restaurants have prepared special menus based on his odes to the onion.