The Red Peak flag will be added as a fifth option in the flag referendum, Prime Minister John Key has confirmed.
The Government has agreed to pick-up legislation that was put forward by the Green Party this afternoon, which means the Red Peak design will join the four flag alternatives already selected.
"The whole way through I have said my preference is to stick with the process that the officials gave us - accept the four [designs already selected.
"I said I was prepared to go outside of that but I just didn't want people playing games. The Greens have been very, very straight - they have said, here is a straight bill.
"In the end, I'm not wanting to be the one that stands in the way of people having some choice."
The remarkable turn-around comes after growing popular support for the design appeared to count for little after a stand-off between National and Labour on how it could be added to the four designs already selected.
However, this afternoon the Green Party offered a solution, and sought to introduce a bill this afternoon to have Red Peak added to the first referendum.
NZ First have blocked the measure. However, it will ultimately be successful after Mr Key's confirmation that National will pick up the legislation itself.
Urgency will be used to get Red Peak added, Mr Key said.
To enhance the chances of National picking up the bill, the Green Party undertook not to support any amendments Labour might put up to change the first referendum question.
Urgency will be used to get Red Peak added, Mr Key said, who added it "doesn't matter" that he personally doesn't favour the flag design.
"The point here is that the Greens are trying to say to Labour - stop being pathetic, stop playing games, people want choices."
However, Green Party co-leader James Shaw said the process set by the Government had been deeply flawed from the start.
It was "absurd" that his MP Gareth Hughes had to put forward a solution today.
"The Prime Minister always has the option, it is kind of ridiculous that it has got to this point. He could have, with the flick of his pen, have included Red Peak as one of the options if he wanted to.
"The fact that Labour have had a go, we have had a go, to get it through the process is kind of absurd, because he always had that option."
Mr Key has repeatedly said he would only add Red Peak as a fifth option if Labour agreed and threw its support behind the flag process rather than criticise it.
In return, Labour leader Andrew Little said he would give Labour's support but wanted the Prime Minister to include the question on whether the flag should change in the first of the two planned referendum - something that would require a law change.
Mr Little has since accused Mr Key of acting in bad faith and trying to put the blame on Labour for blocking Red Peak, saying National could make the change without Labour's support.
Currently, the first referendum will ask New Zealanders to rank the alternative flags. The winner will then run-off against the current flag in a second referendum.
A recent 3 News Reid Research poll showed that 25 per cent of people want to change the flag after seeing the four shortlisted options, while almost 70 per cent said no.
New Zealand First said they opposed Red Peak being added, in line with their strong opposition to any flag change.
Deputy leader Ron Mark said Red Peak design resembled markings on sentry boxes used by the Nazis.
"We will say no to the Green-National Red Peak option. We believe in proper democratic process and we do not want to waste more taxpayers' money."
An overwhelming number of people have turned to Twitter to voice their support and surprise about the inclusion of Red Peak.
Artist John Johnston said it would be a great Kiwi tale if Red Peak was selected.
"Would be a great historical story if #redpeak ended up being the NZ flag, after a not initially being included. People power," he tweeted.
Kapiti Local Board member Richard Hills said now it meant people had a "real choice".
"Congrats Red Peakers - at least we have a real choice aside from Key's Fern-ageddon!" he wrote.
For Ali Maguire it was a time to reference the Rugby World Cup: "Wondering if the #silverfernflag lovers feel a little like @Springboks before last weeks #RWC15 test,confident. #RedPeak"
Anton Posa tweeted support for the flag, and the democratic process: "Big ups to Greens for pushing #RedPeak, and bigger ups to Nats for listening to ppl and including it. We might actually get a new flag now!"
And NewsTalk ZB host Kerre McIvor tweeted she thought New Zealanders would have something to say about the change.
"Praise be to all the angels and saints that I'm not on talkback tonight #RedPeak #flag #aaaasaagh," she wrote.
But Red Peak designer Aaron Dustin, who also works at Xero, has not celebrated the win on social media yet.