The local Orange lodge spearheaded the construction of the garden and it was opened last November.
There was a commemoration planned for yesterday evening to mark the anniversary of the Battle of the Somme.
Lodge deputy master Colin Campbell said the theft and vandalism had angered residents.
He said: “This is the first commemoration to take place at the garden of remembrance in Newbuildings so it is particularly disgraceful that it has been attacked in this way.
“A flag with the Army insignia on it was taken along with the Grand Lodge of Ireland’s Centenary Flag, and one of the wreaths has been stolen and three flag poles were broken off.
“People are very angry at this.
“We had everything sitting in place for the commemoration and I am totally disgusted that this has happened.”
Foyle DUP MLA Gary Middleton said he hoped the incident would not increase tensions in the area and called for anyone with information to contact the PSNI.
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