In a synchronised display, fans of the third-division team raised the banner praising the "Florence of the Elbe", the "club with the best fans" to blanket the stands around the stadium's whole circumference on Saturday.
"Our giant compliments to all those who gave so much commitment, creativity and passion to this unbelievable choreography over the past two years," said Dynamo sports director Ralf Minge in a statement.
"What we experienced today was an unbelievable advertisement for football in Dresden and our sporting community."
Fan group Ultras Dynamo put together "Project X" with support from throughout the Dresden fan scene after coming up with the idea during preparations for the club's 60th anniversary celebrations in 2013.
But it took two-and-a-half years and €25,000 of donations and money raised through club merchandise to produce the 350-metre long, 35-metre high display of loyalty.
By the time 150 organizers directed the 55,000 fans in the stadium to raise the banners simultaneously, the group had worn out eight sewing machines with the 70 kilometres of thread used to create the banner.
In its statement, Dresden said it believed the banner was the largest ever seen outside South America.
On Monday, the club tweeted to thank fans and show off its haul of positive press coverage.
Was für eine #Presseschau!