[1] Light blue denotes the sea that surrounds Penang Island, white represents peace and yellow for the prosperity of the state.

The flag was slightly modified to its present form in the 1960s by removing a torse of blue and white at the bottom of the grassy mount.

[6] In the months preceding Malayan independence, the Settlement Government announced a competition on 17 May 1957 to design a new state flag for Penang.

[8] The new state flag of Penang was raised at noon on 30 August 1957 at the Padang[b] in the presence of the new governor Raja Uda and the last resident commissioner Robert Porter Bingham.

[9][11][12] That evening, the Union Jack was lowered for the final time at 6:45 pm near Fort Cornwallis, George Town, marking the end of 171 years of British rule.