Ipswich City Council's suspended Mayor Andrew Antoniolli has been released from custody, after being held in the city's watch house overnight for allegedly breaching his bail conditions.

The Crime and Corruption Commission (CCC) arrested Cr Antoniolli late on Tuesday and charged him with breach of bail.

Cr Antoniolli appeared in the Ipswich Magistrates Court this morning, where he was granted bail with extra conditions, despite opposition from the prosecutor.

Cr Antoniolli's lawyer said his client didn't pose an unacceptable risk of re-offending. ( ABC News: Timothy Swanston )

In court, Cr Antoniolli's lawyer Dan Rogers said his client did not pose an unacceptable risk of re-offending.

"The height of the allegation is that he spoke to a number of close colleagues at a time when he was returning his property after being suspended pursuant to the recent reforms to the local government act amendments," Mr Rogers said.

"He was described as being upset at the time that he handed that property in.

"And if that breach is proven, it's contact with colleagues — not persons named as witnesses in the prosecution against him.

"He's not charged with attempting to pervert the course of justice and I'd ask Your Honour to disregard any suggestion that he might be."

Mr Rogers said concerns had been raised about Cr Antoniolli's mental health.

"Understandably being charged with criminal offences while [being] a sitting mayor has had an impact on his mental health," Mr Rogers told the court.

"But he has sensibly and proactively engaged with health professionals to manage that.

"He has a treating doctor and a treating psychiatrist who are taking care of those matters with him and importantly he is supported by his wife and his five daughters."

The magistrate granted Cr Antoniolli bail with a number of conditions including that he must not contact or approach any city council employee or councillor and must not enter within 100 metres of the city council premises.

The matter has been adjourned until June 20.

Earlier this month, the 47-year-old was charged with seven counts of fraud by the CCC and released on conditional bail.

He is accused of using council funds to purchase auction items from charitable organisations for his personal use between October 2011 and May 2017.

Cr Antoniolli is one of four Queensland mayors to be automatically suspended after new laws were passed in State Parliament two weeks ago.

Under the reforms, a councillor or mayor faces automatic suspension if they are charged with serious offences.

Veteran councillor says Mayor should resign

Paul Tully, who has been a councillor in Ipswich for 39 years, urged the embattled Mayor to resign immediately and "clear the decks", saying "his political career is clearly over".

"He cannot make a political comeback and should do the right thing by the city and his council colleagues," Cr Tully said.

"For someone who was elected on a platform of honesty, transparency and accountability, he has a long way to go to fulfil his campaign promises."