NAIDOC Week celebrations were officially launched on Monday.
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More than 100 people packed into the Civic Centre at Moss Vale to be a part of the event.
The morning began with a Welcome to Country by Aunty Val before the flag raising and smoking ceremony.
The Black Cockatoos then performed and an art exhibition was also launched.
After years in the making, Uncle Max of the Yuin people officially unveiled the local community's Possum Skin Cloak.
The possum pelts came from New Zealand and mayor Larry Whipper said the story of the local Aboriginal community was etched into the cloak.
"It's the history of the local Aboriginal people," he said.
"All their traditional stories weave the whole thing together and the Rainbow Serpent runs throughout the cloak.
"The way they tell the stories, becomes the story itself. It's quite significant."
The cloak will be on display at council later this week.
The inaugural Williams and Cosgrove Aboriginal and Torres Strait Islander scholarship was also presented to Natasha Raybould.
Ms Raybould is a mature aged student studying a Bachelor of Social Work at the University of Wollongong.
She discovered the scholarship through the Indigenous centre at the university.
Before she received the scholarship, Ms Raybould said she was unable to buy textbooks for her course and struggled with the cost of petrol and parking.
"It took so much [weight] off my shoulders," she said.
"I'm honoured to have this opportunity to be the first and I'm so excited that next year another student will come along and I can help them."
She said she hoped her degree would enable her to help make a difference in the local Aboriginal community.
"It's never too late to go back and study," she said.
"I want to thank the Williams/Cosgrove team. They're like angels."
The scholarship is sponsored by the Ted Kennedy Aboriginal Fund of the Southern Highlands Foundation.
The funds for the scholarship were bequeathed by two former Highlands residents Elizabeth Williams and Brian Cosgrove who worked closely with Catholic priest Ted Kennedy.
To be eligible for the scholarship, applicants need to be of Aboriginal or Torres Strait Islander descent, in their first year of university and be involved with the Indigenous community in this area.
Cr Whipper said it was an impressive turnout on Monday morning.
"I estimate there were about 150 people. It was the biggest I've seen."
Today between 10am and 2pm there will be traditional Indigenous games held at Community Oval, Moss Vale.