The Gorakhpur Development Authority (GDA) last week cleared the project which had earlier obtained clearances form other concerned authorities.
The GDA has asked the electricity department to remove overhead lines that could cause an obstruction in the project.
A young businessman Amar Tulsiyani mooted the proposal last year and his KG Pan Products Private Limited sought permission which was promptly granted.
Tulsiyani has entrusted the project to Sahgal industries which has an expertise in the field.
The state's highest tricolour is hoisted in Ghaziabad at a height of 211 feet but the flag that will be erected at Ramgarh Tal will be 35 feet taller and will stand at 246 feet.
The proposed flag will be visible from a distance of 15 km, claims sources.
The Ramgarh Tal is spread over 1,790 acres of land and is being developed by the Yogi Adityanath government as a major tourist destination.
The lake has an uncertain history to it. It is believed that a village named Ramgarh collapsed in a disaster and left behind a huge hole that eventually got filled with water and was named as Ramgarh Tal.
The Ramgarh Tal is known for its variety of fish and also has a Buddha Museum, a planetarium and a park. Water sport facilities are also being developed.
( With inputs from IANS )