This happened in Legends #3 in January, 1987.
The new team initially consisted of Rick Flag Jr.,Blockbuster, Bronze Tiger, Captain Boomerang, Deadshot, and Enchantress (all villains, except Rick Flag).
The original Squad was quite different. It wasn't made of superheroes or supervillains, but rather a group of adventurous normal humans. It included Rick Flag Jr., the team leader and the only original member to be included in Waller's Squad, physicist Jess Bright, astronomer Dr. Hugh Evans, and flight medic Karin Grace.
It wasn't until Amanda Waller showed up that the Squad was reformed as we know it today.