Art fair curator Janet Bromley said two police officers showed up at her house at the weekend to say the flag had been turned in.

It was believed to have been found wrapped in a plastic bag in a car park near the venue, during a Red Hat Society gathering.

The flag still had attached the raffia string that Ms Bromley had used to fasten the flag to the fence for the event, which was at the old All Saints church at the intersection of Forest and MacKenzie streets.

"We got it back and hung it up for the last day of the exhibition," Ms Bromley said.

"People thought that was pretty good."

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She said the flag's disappearance was strongly felt by a lot of people in the Aboriginal community.

"It does mean a lot to us," Ms Bromley said.

Bendigo NAIDOC executive committee member and Medal of the Order of Australia recipient Anne Conway said whoever had taken it had realised the seriousness of what they had done.

"Any flag is a very significant item," Ms Conway said.

The custodian of the formerly missing flag, Aunty Gabby Gamble, invited those responsible to reach out to an Elder in the Aboriginal community for a yarn about the flag and its significance.

"It would be nice to thank them for returning it," she said.

She was grateful that the flag was in good condition and said it now had its own story - a story not dissimilar from that of the people who so proudly identified, stood beneath it and came together as one voice.

Ms Bromley also thanked those responsible for taking the flag for giving it back.

"Someone has learnt a lesson. We have, too," she said.

She said the flag was affixed to the fence more securely than ever, that final day of the fair.

The apology note will be stored as part of the history of the art fair and Knuldoorong Art Exhibition.

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