It was adopted in 1954 by the Governing Body of the Church in Wales.
In the 1930s, the Church of England started to fly flags of England with the coat of arms of the respective diocese in the upper left of the flag.
This practice became popular and was adopted by the Church in Wales unofficially using a flag of Saint David with the colours reversed in place of the Saint George's Cross.
Following negotiations with the College of Arms, it was decided that the new flag would consist of a blue cross with a white background with a gold celtic cross in the centre.
[1] The flag gained official status on 9 December 1954.