Yep, that is the compression release. It connects to the rear of the valve cover via pushrod, and when rotated so the lever is up, opens the exhaust valves so the engine won't build compression.
I use mine for every start as it saves wear on the engine. It allows oil pressure to build in the crank and rod bearings before you apply compression loads. It also allows the starter motor to quickly spin the crank up to full RPM with low load and less startup electric current. If you have had the misfortune of a headgasket leak which put coolant in a cylinder, it will prevent the piston from hydraulically locking and possibly bending a rod or the crankshaft...
I set the throttle, start the preheat and lift the decompression lever. Then I crank the starter and when it is up to speed, drop the decompression lever and the engine starts...