It is calling for the Assembly to legislate on the flying of the Union flag on public buildings, as part of their blueprint for a shared future.
The Alliance Party walked away from Stormont's working group on Cohesion, Sharing and Integration last year.
Members claimed the issue was not being dealt with properly, and instead, the Alliance document set forward achievable goals for the next decade.
Alliance Party leader David Ford said recent loyalist flag protests and the violence that has broken out following some of the demonstrations highlights the segregation on Northern Ireland's streets.
"Continued divisions in our society impact upon people in many ways, including how we live, how we learn, how we work and how we play. These divisions bring significant human, social, economic and financial costs," he said.
The creation of a shared future would provide better opportunities for all and significantly assist the development of our economy.
The Alliance Party said the flying of flags from lampposts can make people "very uncomfortable" and the document recommends state regulation should be introduced.
"This is not about the celebration of culture, this is about people marking out their territory and deters investment, deters tourism," said MLA Stephen Farry.
"It sets a very bad message about Northern Ireland. We do have to tackle the issue one way or another. We are supporting the issue of regulation. Let's have a talk about exactly how we do that."
Alliance proposals call on the Executive to agree to fly the Union flag from public and civic buildings on designated days.
The blueprint also recommends one fifth of peace walls should be removed within the next ten years and mixed housing should be considered the norm by 2025.
Minister Farry said peace walls were a response to fear and acknowledged that getting rid of them would not happen overnight.
We could talk about a complete ban on flags but that would prevent people from celebrating their culture, so it's much better that we recognise that we have a shared space.
"We have to have a proper dialogue between people and they have to have a proper understanding that to take the leap of faith to trust in each other and whenever things do go wrong, that the authorities will intervene to address those who are seeking to go back and to create divisions that we are trying to heal," he explained.
The strategy also said it hopes to see at least one in every five children educated in an integrated school by 2020 and a cross-party talks process to reach agreed arrangements for dealing with the past.
Jonathan Bell of the DUP responded to the Alliance by saying there is an "unmistakable irony" to their proposals.
"Were they truly serious about delivering their stated aims then they would not have walked away from the cross-party body tasked with delivering on this," the Junior Minister said.
"The truth of course perhaps is that Alliance prefers talking about a shared future much more than working with others to actually achieve one.
"Whilst it is obviously useful to hear as many contributions to the wider debate it would have been more productive Alliance had stuck the course and continued to work with other political parties right across the spectrum in Northern Ireland.
"Consensus politics and not boycotts or solo-runs from political parties who cannot demand their own way will be how a shared future is won in Northern Ireland. In this context Alliance are long on rhetoric but very short on delivery."
Sinn Féin MLA Caitriona Ruane said: "There are complex issues out there including integrated education, interfaces, parades, dealing with the past, identity and symbols to name a few.
"We need to reach consensus on these issues to move forward.
"As we have seen from recent events there is the need for a full debate about what we mean by equality, respect, parity of esteem or mutual understanding. Sinn Féin is up for this discussion, the question is are the other parties?"