The committee arrange for the bunting to be strung across the high street annually to help the town get into the gala spirit.
But last year members were left shocked and angry after being asked by Dumfries and Galloway Council to remove their blue and white penants.
A council official informed them that the bunting posed a ‘danger’ to passing HGVs and trucks.
Committee chairwoman Georgia Bell was especially annoyed as theirs was the only Gala targeted by the local authority.
But now, after months of communication with the council, the group are delighted that the issue has been resolved.
Georgia this week said: “We have had difficulty with the bunting for the past couple of years.
“When we were asked to remove the bunting last year there was a great sadness in the run up to Gala Day, though as always in Lochmaben the community spirit stayed strong and the Gala continued to be a success.”
She added: “I am pleased to confirm that the council are allowing us to put it up this year and we have managed to work together to resolve the issue.
“I am really, really looking forward to Gala 2016 and I, along with the committee, am sure it will be as fun and as well supported as it always is.”
Meanwhile, at Tuesday night’s meeting of the Lochmaben Community Council, community councillors also rejoiced at the council’s decision.