The Sussex Police flag will be replaced with a gay police banner outside Brighton police station during Pride next month.
Gay police officers from Sussex and other forces will, for the first time, join the march in uniform.
Sussex Police said flying the Gay Police Association (GPA) flag showed their commitment to building relationships with the gay community and that Sussex Police supported its lesbian and gay staff and the work of the GPA.
The Sussex branch of the Police Federation welcomed the idea.
Spokesman Graham Alexander said: "It celebrates diversity within the community and the force and I'm sure the flag will be flown with pride."
PC Mark Andrews, the city's lesbian, gay, bisexual and transgender (LGBT) community officer and the GPA's general secretary, said: "Officers marching in uniform in the parade demonstrates that not only do officers police the LGBT community but they are also part of that community themselves and not ashamed to publicly show this."
The Royal Pavilion, for the first time, will be floodlit in pink during Pride Week.
The Pride march starts in Madeira Drive at 11am on August 7 and, for the first time, will parade through the heart of the city, along the seafront, up West Street, down North Street and from The Steine to Preston Park.
More than 90,000 people took part last year, making it the largest Pride event in the country.
Forty police joined last year's march and about the same number is expected this time. Officers from Newcastle, Manchester, Birmingham and London are planning to join Sussex colleagues.
Permission for GPA officers, on and off duty, to march in the parade was given by Deputy Chief Constable Joe Edwards.
The decision is expected to generate criticism from some religious minority groups.
But PC Andrews said this made the GPA more determined to show their presence in the parade.
He said: "It encourages more police to feel confident about coming out and it encourages people within the LGBT community to join the force.
"One in five people in the city are members of the LGBT community and it is important they are represented in their police service and that the service reflects the make-up of the community it serves."
There will be a Sussex Police/GPA recruitment stand in Preston Park on the day of the parade and police will be promoting a new project, True Vision, to encourage self-reporting of homophobic crimes.
Packs handed out will contain a self-reporting form and pre-paid envelope for victims and witnesses.
There is also information on local support groups, streetwise tips, domestic violence and bullying at school.
PC Andrews said: "The under-reporting of homophobic and transphobic crimes means police are unable to accurately monitor where incidents are taking place so we can deploy the right numbers of officers to those areas."
He said some people would rather not attend a police station or speak to officers.
He said: "It will assist us in building a more accurate picture of where incidents are happening and who is committing them."
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