Prayers were led by the head boy and head girl from St Joseph's Primary School.
Royal New Zealand Army Corps Major Tom Purcell thanked the mayor and the people of Hastings for keeping the Guidon safe and conducting the ceremony.
For the last 60 years, the flag hung in the council's civic administration building, initially in the chambers and later transferred to the foyer.
Its special significance lies in the fact that its resting place is in a council building rather than a military camp, church or museum.
In 1935, the Guidon of Queen Alexandra's Waikato/Wellington East Coast Mounted Rifles Squadron was consecrated and presented to the Wellington and East Coast regiment by the Bishop of Waiapu and Major General Sir Andrew Russell, and placed at St Matthew's Church for safekeeping.
It was moved from the Church to acknowledge the bond between the regiment and the community represented by the council.
In addition, its colours differ from the usual crimson and gold – the stripes are black and white silk damask, signifying the Hawke's Bay region.
It also features 11 battle honours that were earned during the First World War by the Wellington East Coast squadron.
It is being temporarily transferred to Linton for safekeeping while council deliberates over the best way to give it the prominence it deserves back in the council chamber.
A charter parade is planned for when the Guidon is returned to Hastings, to mirror the military pageantry which accompanied its consecration in 1935.