The giant boxing kangaroo flag will continue to fly in the athletes' village in Vancouver after Australian Olympic bosses reached an agreement with the International Olympic Committee (IOC).
The flag hangs over two storeys of the apartment block where the Australians are staying.
The IOC wanted it removed but Australian Olympic Committee (AOC) president John Coates says he has reached a compromise and it can now stay in place for the duration of the Winter Olympic Games.
"But we will need to register the boxing kangaroo with the IOC as the third identification we have," he said.
Australian athletes have welcomed the decision.
Australian gold medallist Anna Meares says the boxing kangaroo flag is an iconic symbol that has become a team mascot at Olympic Games.
"It's something that really is held dearly to all Australians," she said.
"It's great to see that it can stay."
While it is already an Australian Olympic trademark, the boxing kangaroo will now be registered with the IOC along with Australia's national flag and the coat of arms.
The IOC initially asked the Australian team to take down the banner because it was deemed too commercial.
Calls to ban the boxing kangaroo flag was branded as scandalous, ridiculous and infantile.
The boxing kangaroo became Australia's sporting symbol in 1983 when it was used in the successful America's Cup.
John Longley was part of the crew.
"It was an image that we created, to be a symbol for what we stood for, which was the red gloves," he said.
"It used to have a red eye and the puffed up chest and so forth. It was aggressive - we're taking the world on."
The AOC has since bought the trademark and now the boxing kangaroo is seen among crowds at Olympic and Commonwealth Games and other major sporting events.
(photo by AFP: Mark Raltson via ABC)
Duh! Australia's Olympic mascot. And a very iconic one at that. Hard to believe that the IOC deemed it 'too commercial'. Hello, the Olympic movement was commercialised years ago.
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