The first official national flag of the Confederacy was commonly called the "Stars and Bars". It was first flown on March 4, 1861. The Stars and Bars was inspired by Austria's national flag and was designed by Prussian artist Nicola Marschall in Marion, Alabama. The Stars and Bars flag was adopted on March 4, 1861 in Montgomery, Alabama and raised over the dome of the first Confederate Capitol in Montgomery.
Info from http://csapedia.wikia.com/wiki/FLAGS_OF_THE_CSA_AND_THE_STATES
Its use was discontinued after it caused confusion on the battlefield during the War of Northern Aggression due to its resemblance to the United States flag.
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