German second division football club St Pauli revealed that it will be permanently hoisting the rainbow flag, which symbolizes gay pride, at their Hamburg stadium.
"The club has been active for many years against homophobia and discrimination," said St Pauli vice-president Dr. Gernot Stenger.
"With this flag, we are giving this highly-visible sign that these issues have great importance at St. Pauli and we are working hard on them."
Dirk Bruellau of the club's gay and lesbian fan club Queerpass Sankt Pauli, backed the move and said it would now be a "quantum leap for the football world" if one of the 18 clubs in Germany's top-flight Bundesliga followed suit.
With the famous skull and crossbones on their supporters flag, St Pauli is one of Germany's cult football clubs and their fans are often identified with left-wing politics.
Homosexuality in German football has been a topic since chancellor Angela Merkel told gay footballers last September they should have no fear of revealing their sexuality.
As part of the "Go your own way" campaign, Merkel said: "Anyone who sums up the strength and bravery should know that they live in a land where they have nothing to fear."
While senior political figures, such as German Foreign Minister Guido Westerwelle and Berlin's mayor Klaus Wowereit, have come out, no current German Bundesliga footballer has revealed his homosexuality.
The German Football Federation (DFB) has plans to advise clubs on how to handle the anticipated media interest and reaction from fans if a player came out.
In 2011, Germany striker Mario Gomez said openly gay footballers "would play as if they had been liberated. Being gay should no longer be a taboo topic."
But national team captain Philipp Lahm later advised against it. "An openly gay footballer would be exposed to abusive elements," he told German magazine Bunte.
"For someone who does (come out), it would be very difficult."
But a homosexual Bundesliga footballer, who insisted on anonymity, told German magazine Fluter he would not feel safe if his sexuality were revealed.
"The price you have to pay for living the dream of playing in the Bundesliga is immense," he said.
"I have to be an actor and I have to lie to myself every day."
"This wasn't a problem to begin with, but it has become increasingly difficult over time."