The alternative national flag option will be flown from the Elizabeth St flag pole as early as next week ahead of March's referendum.
The current flag and the alternative flag will be flown on alternate days to give people a chance to see both in use and has already sparked debate among residents.
Bay of Plenty MP Todd Muller put forward the idea to fly the Silver Fern flag to Tauranga City Council after a conversation with civic leader Paul Farmer.
"We are heading into the final stage of the referendum and it is critical that our local community has a chance to see the alternative flag in full flight to assess which of the two flags they support," he told the Bay of Plenty Times.
"The flagpole is an icon in our city and this referendum is a once-in-a-generation event.
"That is why I have approached the council to consider whether the two flags could take turns being displayed on our flagpole."
Mr Muller, who advocates change, has always supported a new flag, although the Silver Fern was not his first choice.
"When I see it flying, I get more enthused by it."
The change was not a decision to be taken lightly, he said. "For me a flag which has a Union Jack on top left corner of the flag reflects very much our history, as opposed to who we are today in 2016."
Tauranga Mayor Stuart Crosby said the council would fly the alternative flag from the Elizabeth St flag pole from as early as next week.
"The purpose is to generate interest in the upcoming referendum but we need to stress that the council does not have a position on the flag debate," he said. "We totally expect controversy."
Mr Crosby said the council had made the decision via a straw poll before Wednesday's not-so-secret meeting of MPs. The meeting, organised by Arts, Culture and Heritage Minister Maggie Barry, is understood to have been made in response to dwindling public support for the alternative flag.
Mr Crosby said only one councillor opposed the idea.
The council had already been flying the alternative flag alongside the current flag at Baycourt theatre but the flags were stolen over Waitangi weekend.
Mr Crosby said his personal preference was for a change, but not with the alternative option.
Councillor Gail McIntosh said she supported the flag change.
"We should fly it so people know what the new flag would look like, the trouble is we don't have two flag poles where we can fly them side by side," she said.
Tauranga RSA general manager Graham Howard said the RSA's stance on the flag debate had not changed - no change.
"The Elizabeth St roundabout is where the national flag is, that [the alternate flag] is not the national flag."
NZ First MP Clayton Mitchell said support for the alternative flag was losing momentum.
"It seems National has given the word to their MPs to get out into their communities to try and do whatever they can to rescue this disastrous flag change referendum nonsense."
Mr Mitchell wanted to keep the current New Zealand flag.
Places showcasing both flags:
* 41a May St, Mount Maunganui
* 16 Moa St, Mount Maunganui
* Sun Pacific Villas, 123 Muricata Ave, Mount Maunganui
* Waimarie St (just past Totara/Hewletts Rd), opposite Port of Tauranga, Mount Maunganui
* Hynds, 84-86 Newton St, Tauranga
* Papamoa Beach Family Tavern, 20 Domain Rd, Papamoa, Tauranga
* Tauranga City Council, 91 Willow St, Tauranga
* Tauranga Hire, 15th Ave, Tauranga
* 12 Hazelnut Way, Bellevue, Tauranga
* 39 Vivian Drive, Omokoroa
* Tauranga Bridge Marina, Berth E03