I made this bag with cotton yarn for easy washing so I could use it to carry my sourdough rolls which I make every morning to have as a snack during my busy days as a toddler teacher, however, this pattern is designed to make any size bag for any purpose, just size up the gauge or increase the stitches.
You may knit it all one color, or two colors like mine. I got lucky and found a matching button in my box of notions.

I used random scraps of cotton yarn I had so I’m not exactly sure the type or gauge of it, however, as mentioned before, gauge isn’t important.

I used blue as Color A and a berry red/maroon as Color B.

Berry Bread Bag Pattern:

K: Knit
P: Purl
sl1 wyif: hold yarn in front and slip 1 purlwise
sl1 wyib: hold yarn in back and slip 1 purlwise

You will also need to know the 3-needle-bind-off, how to sew on a button, and how to make I-cord.

Cast on 51 stitches in Color A (Any odd number is fine)

Flap:
Knit 9 rows in linen stitch:
Right Side: K1, sl1 wyif, repeat until last stitch, K1
Wrong Side: sl1 wyib, P1, repeat until last stitch, sl1 wyib

Row 10 (Wrong Side): P23 in Linen Stitch pattern (See above), bind off 5 stitches, P23 in Linen Stitch pattern

Row 11 (Right Side): K23 in Linen Stitch pattern, Cast on 5, K23 in Linen Stitch Pattern

Continue with the Linen stitch pattern until Button Flap is as long as you desire. I did about 5 inches, or until I got bored.

On a Right Side row, complete the Linen Stitch pattern over 51 stitches, then cast on an additional 50 stitches (or whatever number your initial cast on was, minus 1).

Bag:
Join in the round, being careful not to twist, place a marker, and continue to knit Linen Stitch in the round. (The total stitches must be odd numbered in order for the Linen Stitch pattern to work).

Round 1: sl1 wyif, K1, repeat until last stitch before the marker, sl1 wyif

Round 2: K1, sl1 wyif, repeat until last stitch before the marker, K1

Repeat Rounds 1 and 2 until bag reaches the desired length.
At this point I switched to Color B and went 4 more rounds before casting off, to give it a bit of a color contrast.

Bind off using the 3-needle-bind-off.
You will find you have an uneven number of stitches. Separate your stitches so that there is 25 on one needle and 26 on the other. On the 13th-ish bind off stitch, I grabbed an extra stitch from the needle that had the 26 stitches and knit it together with the normal stitch from each needle so that 3 stitches became one stitch to bind off, and evened it out. Alternately, you could knit the last stitch together with the first stitch on the final round, before bind-off.

Break the yarn.
Cast on 4 stitches with Color B to a dpn (or just continue to use the circular needle, it’s just a little clunkier, but it’s what I did).

Knit I-cord for a handle. You can knit it as long as you want the handle to be. I did 15 inches.

Sew the I-cord to the points where the flap turns into the bag.

Sew on a button where the button hole lines up on the bag.

Sew in the ends.