Tasmanian Aboriginal leaders have welcomed the decision, with state and federal government representatives largely dismissing it.

Anticipating the federal backlash to similar local government votes across the country, the City of Launceston will now hold a citizenship ceremony on January 25 - unless directed otherwise.

The federal government has this year flagged changes to mandate that councils hold citizenship ceremonies on January 26. Those are yet to head to parliament.

Other changes from the council will include a replacement of the National Australia Day Awards program with a "community recognition awards ceremony - also to be held on January 25 - and a backing out of the National Australia Day Ambassador Program.

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The city's Music in the Park program will also be held on Sundays only throughout January without a separate performance if this does not fall on January 26.

Before the unanimous vote, almost all councillors present spoke to the importance of supporting Indigenous members of the community and those who do not believe January 26 - which marks the arrival of the First Fleet and was only declared a national public holiday in 1994 - should be a day for celebration.

Mayor Albert van Zetten hoped the move would be one which might better "unite" the community.

Cr van Zetten said he was grateful for all who had spoken with council about the matter, describing the decision as one of acknowledging history and "choosing to be a more inclusive society that wants to have a more meaningful relationship with every member of its community."

[City of Launceston council debates Australia Day date]

Given the wording of the motion, he expected it would be "very unlikely" to see the federal government strip the city's power to hold citizenship ceremonies like it had in the wake of some other council decisions nationwide.

"It's a pleasing result," said Aboriginal Land Council of Tasmania manager Graeme Gardner. "There is a shift occurring, and we're seeing a lot of councils across the country taking a stand."

Land council chairperson Michael Mansell said the federal pushback showed a rift between the approach of both levels of government.

"Local governments are reflecting broad community sentiments, whereas the federal government are just being hard-nosed," he said.

Reacting to the decision, Bass Liberal MHR Bridger Archer said while she recognised January 26 could be "difficult" for Indigenous Australians and there were "divergent views" on celebrating it, she supported Australia Day and "all related activities" remaining on it.

Tasmanian Local Government Minister said the state government did not support the idea of "changing Australia Day".

"I'm hopeful that today will be a new dawn," councillor Tim Walker told the meeting, noting the emotional nature of the matter and its importance to him in joining the council.

Many councillors also noted some concerns raised with them about a perceived lack of public consultation on the changes.

To this, Cr Walker said he would ask "whether we would have a community consultation about continuing to insult a section of our community."

"And let me make something very clear also," he added. "That Australia Day will still exist, it's not going to disappear."

Addressing the meeting before the vote, Mr Gardner said Australia was the only country "that doesn't celebrate its original inhabitants".

He added that the vote and discussion would be about "your role as leaders in the community" on a matter of inclusion and "mutual benefit for all".

"The national anthem states we are young and free - we are not young, and some may argue we are not free," Mr Gardner said.

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