The NSW government has scrapped its plan to install an extra flagpole on the Sydney Harbour Bridge to fly the Aboriginal flag.
Instead the Aboriginal flag will permanently replace the NSW flag on the iconic structure.
Premier Dominic Perrottet on Sunday confirmed the change to the Sydney Morning Herald, labelling it a "practical and pragmatic solution which makes sense".
The $25 million cost of the additional flagpole installation was revealed by Mr Perrottet last month. The funding will instead be reallocated to Close The Gap initiatives.
The Aboriginal flag had been flying over the Sydney Harbour Bridge this past week for NAIDOC Week.
Following Mr Perrottet's commitment, the Victorian government also recently made the decision to permanently fly the Aboriginal flag on Melbourne's West Gate Bridge.
The NSW flag will be relocated to the redeveloped precinct on Macquarie Street in the CBD.