During the establishment of the Russian Soviet Republic, Vladimir Lenin and his followers had considered the inclusion of a sword symbol in addition to the hammer and sickle as part of the state seal on which the flag was eventually based. The idea was dismissed as too visually aggressive, with Lenin apparently affirming, "A sword is not one of our symbols."[8]

The first official flag was adopted in December 1922 at the First Congress of Soviets of the USSR. It was agreed that the red banner "was transformed from the symbol of the Party to the symbol of a state, and around that flag gathered the peoples of the soviet republics to unite into one state — the Union of Soviet Socialist Republics". On 30 December 1922, the Congress adopted a Declaration and Agreement on the establishment of the USSR. Article 22 of the Agreement states: "The USSR has a flag, coat of arms and a state seal." The description of the first flag was given in the 1924 Soviet Constitution, accepted in the second session of the executive committee (CIK) of the USSR on 6 July 1923. The text of article 71 states: "The state flag of the Union of Soviet Socialist Republics consists of a red or scarlet field with the state's coat of arms." It was ordered with the unusual ratio of 4:1 in proportion and consisted of a red flag with the state coat of arms in the center. However, such a flag was never mass-produced. This flag was the official flag for four months, and was replaced as the official flag by the more familiar hammer and sickle design during the third session of the CIK of the USSR on 12 November 1923.

In the third session of the CIK of the USSR, the description of Soviet flag in the Constitution was changed, and article 71 was edited to read: "The state flag of the Union of Soviet Socialist Republics consists of a red or scarlet field, and in the canton a golden sickle and hammer, and a red five-pointed star bordered in gold above them. The ratio of width to length is 1:2." On 19 August 1955, the Statute on the State Flag of the Union of Soviet Socialist Republics was adopted by a decision of the Presidium of the Supreme Soviet of the USSR. This resulted in a change of the hammer's handle length and the shape of the sickle. On 15 August 1980, a new edition of the Statute on the State Flag of the Union of Soviet Socialist Republics was adopted, which did not make any changes to the flag's description aside from removing the hammer and sickle on the reverse side of the flag.[9] From this point on, the flag stayed in use with this design until the disintegration of the USSR on 26 December 1991, at which time it ceased to be a national flag and replaced by national flags of the post-Soviet republics.

On 15 April 1996 Boris Yeltsin signed a presidential decree giving the Soviet flag (called the Victory Banner, after the banner that was raised above the Reichstag on 1 May 1945) status similar to that of the national flag. The hammer and sickle were removed from the flag