The Aboriginal, Torres Strait Islander and Australian flags were flown outside of council to mark the start of National Reconciliation Week.
Esperance Tjaltjraak Native Title Aboriginal Corporation and Shire Esperance held the flag raising ceremony on Monday, May 27.
A draft Reconciliation Action Plan is expected to be approved by council at their next meeting on May 28.
If the draft plan is approved by council and confirmed by Reconciliation Australia, it will see the flags remain outside the Shire Administration building permanently.
Community elder Annie Dabb said having the flags outside chamber was a "step in the right direction".
"It's positive for the Aboriginal people," she said.
"We have been struggling and fighting all of these years to be recognised.
"We are here and we're not going anywhere."
Mrs Dabb said she felt "proud" raising the flags to mark the start of Reconciliation Week.
She said it had been a long process to educate the community on the history and culture of local Aboriginal people.
"A lot of people are unaware of the culture of the Nyungar people that is in Esperance," Mrs Dabb said.
"I think people are slowly understanding a bit about the Aboriginal culture and where we come from.
"I'm just so happy this has finally happened."