The flag, which bore a double 'S' in the style of the Nazi paramilitary force, was seen during Gamba's 2-2 draw against city rivals Cerezo Osaka on April 16.
Gamba said on its website that it has told the supporters' group responsible to disband, and that all banners were also prohibited indefinitely.
"We spotted the group, which comprises about 60 to 70 people," team spokesman Kenji Okunaga said Friday.
"Most of them are Japanese but it also includes some foreigners."
"So we decided to take these measures," he said.
The J-League prohibits displays of any kind linked to political ideology, religion or race and also bans racial and other forms of discrimination.
In 2014, Urawa Red Diamonds were forced to play in an empty stadium as punishment for a "Japanese only" banner unfurled during a match in Tokyo.
Periodic actions and comments in Japan deemed anti- Semitic have drawn controversy and international criticism, though ignorance has usually been blamed.
And rock band Kishidan angered the Simon Wiesenthal Center in 2011 when they wore a costume that the Jewish human rights organisation said resembled a Nazi uniform.
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