In 1925, after a coalition government took office, a bill was introduced in Parliament to introduce a national flag for the Union of South Africa. This provoked often violent controversy that lasted for three years based on whether the British Union Flag should be included in the a new flag design or not. The Natal Province even threatened to secede from the Union should it be decided to remove it.

Finally, a compromise was reached that resulted in the adoption of a separate flag for the Union in late 1927 and the design was first hoisted on 31 May 1928. The design was based on the so-called Van Riebeeck flag or Prinsenvlag ("Prince's Flag" in Afrikaans) that was originally the Dutch flag; it consisted of orange, white, and blue horizontal stripes. A version of this flag had been used as the flag of the Dutch East India Company (known as the VOC) at the Cape (with the VOC logo in the centre) from 1652 until 1795. The South African addition to the design was the inclusion of three smaller flags centred in the white stripe. The miniature flags were the British Union Flag (mirrored) towards the hoist, the flag of the Orange Free State hanging vertically in the middle and the Transvaal Vierkleur towards the fly.

The flag was used from 1928 until 1994.

More Info: en.wikipedia.org