This section of the Berlin Wall was gifted by the city of Berlin to Reykjavik in 2015 to commemorate the 30th anniversary of the historic meeting between Presidents Mikhail Gorbachev and Ronald Reagan, which took place in October 1986 at Höfði House, located nearby.
You can find the Berlin Wall section along Borgartún 22, Reykjavík 105, near Höfði House.