Prime Minister Malcolm Turnbull attends an Australia Day Citizenship Ceremony and Flag Raising event in Canberra on January 26, 2017.
Four of Yarra Council's nine councillors identify as Green, including the mayor Amanda Stone, according to The Greens Victoria website.
The assistant minister for immigration and border protection, Alex Hawke, said the government "would not tolerate Yarra council's use of citizenship ceremonies as a political device in a campaign against Australia Day being celebrated on January 26".
The council will also stop holding citizenship ceremonies on that day and will lobby the federal government to change the date of Australia Day'.
Stefanovic agreed with the decision and said the day represented the time Australia changed forever.
"They came to us and said, 'We're up for celebrating Australia, there's a lot of things to celebrate, but why that day?"
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"No one is going to jail because they are having an Australia Day barbecue". The Council will no longer hold a citizenship ceremony on January 26, but will continue to hold the bimonthly ceremonies on other days throughout the year.
Indigenous rapper and one half of A.B. Original, Adam Briggs, took to Twitter to applaud the decision, which he was of course pushing for fiercely with the outfit's fierce anti-Australia Day anthem "January 26" featuring Dan Sultan.
Australia Day marks the anniversary in which the British first arrived in 1788 and claimed sovereignty over Australia, a day some Australians, particularly indigenous people don't believe in.
Last week, TV personality Karl Stefanovic used his morning television spot to announce the date for Australia Day "must change". "To change the date would be to turn our back on Australian values".
Mr Turnbull's outrage was shared by Victorian Premier Daniel Andrews who called the council's decision "unnecessary".
Mr Hawke has also written to Local Government and Territories Minister Fiona Nash asking her to consider revoking federal funding to Yarra for citizenship ceremonies.
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'Local councils are now on notice that if they politicise Australian citizenship, the government will see it as a breach of the (Australian Citizenship Ceremonies) code and take the appropriate action, ' he said.
"I am surprised and disappointed that the City of Yarra has chosen to pursue this divisive approach", he said.
'I don't think anybody should be trying to diminish that. "Why would we want to celebrate the day our culture was destroyed?"
Mr. Jolly said the Indigenous community had approached the council to discuss the possibility of moving celebrations to another day.
An Australia council has made a decision to end its relationship with the country's national holiday in support of its indigenous community members.
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