The Launceston City Council has voted to scrap its Australia Day celebrations and instead hold them on a less contentious day, becoming the state's second municipality to do so.

Key points: The Launceston City Council will hold its citizenship ceremony to the day before Australia Day

The Launceston City Council will hold its citizenship ceremony to the day before Australia Day It is the second Tasmanian council to do so and follows changes by several interstate councils

It is the second Tasmanian council to do so and follows changes by several interstate councils The Federal Government is yet to implement changes to ensure councils hold ceremonies on January 26

The council will now hold its citizenship ceremony, which is usually held on Australia Day, on January 25.

Its National Australia Day Awards program will also be replaced with a "community recognition awards ceremony", also to be held on January 25.

The council is the second in Tasmania to move away from holding festivities on Australia Day out of respect for Indigenous people.

The Flinders Island Council moved its celebrations in 2013.

Voice of Tasmanian Aboriginal people 'being heard'

Graeme Gardner, from the Aboriginal Land Council of Tasmania, said the council's decision represented "the first step in recognising Aboriginal history in Tasmania and across Australia".

"It is significant in the fact that we've seen leadership from the City of Launceston Council, in that it's being inclusive and that it's being mutually beneficial for all persons that live in this region," Mr Gardner said.

"The voice of Tasmanian Aborigines are being heard, they have been very loud over a period of time, but now the listening is taking place.

"What we would want to see is the country collectively change its whole perception of what it is to celebrate Australia and make it a celebration of all history."

Graeme Gardner is pleased with the Launceston City Council's decision. ( ABC News: Manika Dadson )

Launceston Mayor Albert van Zetten said he was pleased with the result of the vote, where all councillors that were present voted in favour of the change.

"It's an important day," Mr van Zetten said.

"I really encourage all our members [of the community], especially those that feel Australia Day has to be on the 26th, to have a look at the history, understand what really happened on that day and how it affected some people.

"How can we celebrate when people feel it's a day of death for them, it's a day that's very negative to them and it's something we need to work on together?"

The council did not consider the question of whether the date that is currently recognised as Australia Day should be changed.

Federal Government changes loom

Tasmanian Liberal Senator Eric Abetz said the council was ignoring the majority of people who supported celebrating Australia Day on the current date.

"For the council to be so out of step with their ratepayers is a matter of great disappointment and what it will be is causing division within the community alienating three quarters of their ratepayers in the name of virtue signalling," he said.

It is not yet clear what federal ramifications there will be because of the changes.

Earlier this year, the Federal Government announced plans to update the Australian Citizenship Ceremony Code and mandate that all local councils across the country hold citizenship ceremonies on January 26, but those legislative changes are yet to go to parliament.

Several councils around the country — including Melbourne's Yarra and Darebin — had been stripped of their power to host citizenship events after voting to move the ceremonies.

Yarra City Council replaced its citizenship ceremony with an event "marking the loss of Indigenous culture".

"We believe that all councils should say yes to Australia Day," Immigration Minister David Coleman said in January.

"The changes that we're proposing to make to the citizenship code will mean that councils will no longer be able to say no to Australia Day."

The Federal Government said an announcement on the proposed code changes was expected soon.