UN Secretary-General Ban Ki-moon and Abbas will preside over the 15-minute ceremony in the rose garden, to begin at 1:00pm (1700 GMT) shortly after the Palestinian leader addresses the General Assembly.
Abbas, 80, called it "our moment of hope," in an op-ed published by The Huffington Post on the eve of the ceremony.
Rain is forecast for much of the day, which could put a damper on an occasion condemned by Israel and the United States as a symbolic gesture that would not serve the cause of peace.
Hundreds of world leaders are invited, but an official at the Palestinian mission to the UN could say only that "a large" number would attend.
The General Assembly voted September 10 to allow the flags of Palestine and the Vatican -- both have observer status -- to be raised at the world body alongside those of member states.
The resolution was backed by 119 countries, with 45 abstentions and eight votes against, including Australia, Israel and the United States.
In The Huffington Post, Abbas urged the international community to urgently "seize the momentum" from the flag-raising and provide a clear plan to end Israeli occupation, uphold human rights and achieve justice.
"It is time to finally achieve the independence of the State of Palestine, peacefully resolving the Palestinian-Israeli conflict," he wrote.
Abbas called for a multilateral peace process as in the Balkans, saying that Palestinians cannot negotiate directly with Israel, which "exhibits such contempt for the rights and existence of our people."
His address to the General Assembly, expected at 12:00 pm (1600 GMT), will be closely watched for clues about his intentions at a time of growing volatility.
- Tensions rising -
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Clashes in recent weeks between Israeli police and Palestinians at the sensitive Al-Aqsa mosque compound in Jerusalem have raised tensions and prompted Abbas to warn of the risk of a third intifada.
Speculation has been growing about whether his retirement is imminent or whether he intends to take the drastic step of dismantling the Palestinian Authority to re-energize the push for statehood.
A recent poll found that Palestinians are increasingly exasperated with his leadership and Israel's right-wing government.
A majority favor a return to armed uprising in the absence of peace talks and two thirds want Abbas to resign.
"Abbas is going to tell everyone that the current situation is no longer tenable, that the Authority has authority in name only, while Israel is destroying any idea of a two-state solution," a Palestinian official told AFP earlier this week, declining to provide further details.
In the runup to the speech, there have been reports that Abbas would use the opportunity to drop a "bombshell."
Suggestions of what that could mean have included a complete withdrawal from the Oslo accords of the 1990s or the dissolution of the Palestinian Authority that those agreements created.
While such an announcement could potentially have a major impact, many analysts question whether Abbas would truly press ahead with it.
On Wednesday, the UN chief will also chair talks with the Diplomatic Quartet seeking a political settlement to the conflict.
The peace process has been in the doldrums since the latest US diplomatic effort failed in April last year.
In a shift, Egypt, Jordan, Saudi Arabia and the Arab League have been invited to the meeting, along with the foreign ministers of Russia, the United States and EU foreign affairs chief Federica Mogherini.
Israeli Prime Minister Benjamin Netanyahu will address the United Nations on Thursday and call on Palestinians to stop "incitement to violence."