"SAVE Australia's flag" was the call on Saturday as hundreds of supporters rallied in Singleton in support of the Caledonian Hotel.
In January, the hotel contracted trades to install a representation of the Australian "red ensign" on the building's roof.
However, The Cali - as it is known locally - is a heritage listed building.
Due to not submitting a development application, the hotel was notified of council's intention to "issue a Development Control Order for the removal of a painting of a Union Jack and Southern Cross".
"After a suggestion to show support of the flag being there, a small group of locals came up with the idea of a peaceful walk through town to the Cali," rally organisers said in a statement to the Newcastle Herald.
Those involved in Saturday's rally walked from the Singleton sundial to The Cali. While organisers estimated up to 500 people in attendance, NSW Police Inspector Guy Guiana put the numbers between 250 and 300.
The red ensign is an iteration of the Australian national flag but features a red, rather than blue, background. The flag has a strong connection with merchant vessels and, until the Flags Act 1953, was often used by the general public on land as Australia's national flag.
The flag design depicted on the roof of The Cali shows the Commonwealth Star with six points rather than seven - as it was changed to in 1908 to include Australian territories.
"The flag represents a uniting of the people," rally organisers said.
"It is the original Australian flag that was used from federation until it was updated in 1908.
The Cali's flag issues were prefaced by their renown as the "Freedom Pub", which came about last year through "repeated and continued breaches of the Public Health Order".
Among the speakers on Saturday was Independent federal candidate for Hunter, Stuart Bonds, who described The Cali as "a symbol for individual liberty".
"For me personally today isn't about that flag on the roof, although I do like the flag," Mr Bonds said.
"To me, today is about showing my appreciation for what these guys did when the great hands of the state grabbed them around the neck.
"This pub, with those signs hanging out the front saying we will not discriminate against free citizens for their medical choice, has gone global."
