The Confederate flag became popular at Sutton District High School in the last two years, Dawn Laliberte, the school's principal, said.
School officials explained the flag's symbolism to students this week and then implemented the ban, the Toronto Star reported.
Most students were angry at the decision and said the school was trying to control what they wear.
"It's more about the country values, we don't think of it as racist," a student said.
The president of the Ontario Black History Society, Rosemary Sadlier, told the Star the use of the symbolism shows a lack of knowledge about history.
"What it represents is the interest of people in the Deep South to maintain a way of life that fervently and significantly was built upon and included an ongoing use of Africans as enslaved people. For that very reason alone, it is inappropriate and wrong," Sadlier said.