Former Olympic 110metres hurdles semi-finalist and Wales rugby international Nigel Walker joined the Group Chief Executive of the Welsh Rugby Union, Roger Lewis, to hoist the flag, which will be in place over the coming weeks.
The Millennium Stadium will host preliminary round, quarter-final and semi-final soccer matches in the London 2012 games and has official venue status.
Venues around the UK where 2012 events will be held have the right to fly the flag to signify their involvement.
Stadium and WRU boss Lewis said: “We’ve seen from the success of Beijing that the whole world watches when the Olympics is taking place.
“The eyes of the world will be on Wales in 2012 and the Millennium Stadium will be a proud symbol of our nation for the world to see.
“We have worked extremely hard to ensure the people of Wales get a chance to experience the Olympics at first hand.
“All of us look forward to welcoming the world to Wales in 2012.
“Everyone at the WRU would like to take this opportunity to congratulate the fantastic achievements of the Welsh sports men in women in this year’s Olympics and we will be celebrating their success in our Invesco Perpetual Autumn internationals, when we invite them as our special guests during those matches.
“The WRU would also like to thank Lord Coe for his help and support in delivering this great honour to Wales.
“Our close relationship with the Sports Council here in Wales and the Welsh Assembly Government will always be reflected in our desire to champion sporting events our nation in as many ways as possible.”
Lord Sebastian Coe confirmed in a letter this month to the WRU an outline of the activities to be held at the Millennium Stadium.
Nigel Walker, represented Team GB in the 110 metres hurdles at the 1984 Los Angeles Olympic Games and is currently on the Board of UK Sport, said: “The selection of the Millennium Stadium as an Olympic venue is a great honour for the whole of Wales.
“I was privileged to represent my country at the Olympics and then to go on to play rugby for Wales so this has a special relevance to me.
“Here in Wales the whole nation understands the value of sporting excellence and so bringing Olympic events here is very significant.
“We just witnessed some great British performances at the games in Beijing and there will now be huge interest in seeing what our team can achieve in 2012.”
Chairman of the London 2012 Organising Committee, Lord Coe, wrote:
“We are very much looking forward to the Millennium stadium hosting a number of matches in our Olympic football tournament.
“I can confirm that the Millennium Stadium will host preliminary quarter-final and semi-final football fixtures.
“Further direction from FIFA and the IOC on the format of the competition and the number of competing teams will be agreed early next year.”
