The Pride Cup was played between Yarra Glen and Yarra Junction, traditional rivals in the Yarra Valley Mountain District Football League, at the Yarra Glen Football Ground.
It was easily won by Yarra Glen, 17.15 (117) to 2.14 (26).
The idea came from Yarra Glen coach Dean de Munk and assistant coach Sam Hills, who wanted to show support for local gay footballer Jason Ball, who plays at centre half-back.
AFL football operations manager Mark Evans said the League would support the concept being translated onto the elite stage if two clubs wanted to take it on.
"It's a brilliant concept and if there are clubs out there that would like to press this further, the AFL is absolutely here for them," he said.
"I'm sure there have been discussions already at clubs, and from the AFL's perspective, when they're ready to take on this issue, so are we.
"We need a couple of clubs to be bold enough to put a match together like this.
"We've moved away from theming rounds but we certainly wouldn't be against clubs coming to us with concepts for a match."
The two teams and local community were more than supportive of Saturday's game, which saw rainbow colours – the international symbol of gay pride - painted on the 50m lines of the ground.
Ball, who came out in 2012, said staging the Pride Cup on the grand stage would do plenty for encouraging the acceptance of diversity.
"I think over the next few years it would be great to see the Pride Cup replicated at other grassroots sporting organisations and even at the national level at the AFL," Ball told local radio station 3MDR on Saturday.
"That would send such a clear message that being gay is OK, which is a message that young people really need to hear.
"I think that if we can get to a point where an AFL player at the pro level feels comfortable enough to come out, that would be a real game changer."
Ambassador and Carlton footballer Brock McLean presented the Cup to Yarra Glen after speaking at the pre-match function.
McLean's sister Ellie is gay and he became the first AFL footballer to support the No To Homophobia campaign last year, and he took part in the state's Pride March with Ball and Richmond footballer Dan Jackson.
McLean said it was incredible to see such "a landmark shift" in AFL players speaking up for equality in sport in recent times.
"Days like today and the Pride Cup … you can't really put into words what it means for one, the gay community, and two, just for that message of acceptance in sport," McLean said.
"It's one thing for a gay person to stand up for gay rights but it holds so much more weight and power when a straight person stands up for gay rights."
In response to Ball's story, Evans said AFL players understood the challenges one of their contemporaries would face if he came out but emphasised clubs would accept them if they did.
Ball said the public support of AFL footballers had made a big difference when it came to acceptance.
"A lot of people in football look up to them and I think that's really how you can get through to the greater footy community," Ball said.
"Football players … it kind of gives permission for people to get on board with this cause.
"It breaks down a lot of stereotypes because footballers are the quintessential macho kind of Aussie bloke and to see that they're standing up against homophobia, I think it gives other people permission to do that as well."
Twitter: @AFL_JenPhelan
