The club were fined 30,000 euros ($34,000) last July after supporters waved the flags, known as esteladas, during the 2015 Champions League final in Berlin.
They were also fined 40,000 euros ($45,000) in October, 2015 after fans brought the flags to their Champions League game against Bayer Leverkusen.
UEFA's Control, Ethics and Disciplinary Body ruled the club had breached article 16(2)(e) of their regulations, which prohibits "the use of gestures, words, objects or any other means to transmit any message that is not fit for a sports event, particularly messages that are of a political, ideological, religious, offensive or provocative nature".
The Court of Arbitration for Sport is currently studying the case following Barcelona's appeal.
Pro-independence groups including the National Catalan Assembly (ANC) announced they will distribute the flags before the game with Celtic, which comes two days after Catalonia's national day.
Hundreds of thousands of people took part in a pro-independence march in Barcelona on the national day, Sept. 11, which was also commemorated by the club, including president Josep Maria Bartomeu and captain Andres Iniesta.
As is customary at Barcelona home games, supporters will chant in favour of independence during the game with Celtic after 17 minutes and 14 seconds of each half, marking the Siege of Barcelona in 1714.
Spanish police announced earlier this year that supporters would not be able to bring the flags into the King's Cup final with Sevilla in May, although the ban was lifted on appeal.
(Refiles to clarify headline)
(Reporting by Richard Martin; Editing by Toby Davis)
