He was joined by fellow Brexit Party MEPs in mockingly waving goodbye with the flags, before filing out of the chamber.
It came ahead of the key vote in which Boris Johnson’s Withdrawal Agreement was set to be ratified.
Mr Farage said: “I want Brexit to start a debate across the rest of Europe. What do we want from Europe? We want trade, friendship, co-operation, reciprocity.
“We don’t need a European Commission. We don’t need a European court. We don’t need these institutions and all of this power.
“I can promise you, both in Ukip and indeed the Brexit Party, we love Europe - we just hate the European Union. It’s as simple as that.
“I am hoping this begins the end of the project. It’s a bad project. It isn’t just undemocratic, it’s anti-democratic and it gives people power without accountability. That is an unacceptable structure.”
He went on: “No more financial contributions. No more European Court of Justice. No more Common Fisheries Policy. No more being talked down to. No more being bullied. No more Guy Verhofstadt [an anti-Brexit MEP]. I mean, what’s not to like?”
Picking up his flag, Mr Farage said: “We are going to wave you goodbye and look forward to working with you as sovereign…”
Mr Farage was then cut off, with flag waving not permitted in the chamber.
He was also reprimanded for using the word “hate”.
As they filed out, the Brexit Party MEPs were then told: “Put your flags away, you’re leaving - and take them with you... if you’re leaving now.”
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After the speeches, Brexit Party MEPs shared a round of drinks at the bar in the European Parliament in Brussels.
MEP Martin Daubney posted a video from the bar, tweeting: “It’s a carnival atmosphere for jubilant Brexiteers!”