An inner-Melbourne council will vote tonight on whether to stop referring to January 26 as Australia Day, and whether to replace the annual citizenship ceremony with an Indigenous smoking ceremony.

Proposed changes: Hold a small-scale, "culturally sensitive" event featuring a smoking ceremony on January 26.

Hold a small-scale, "culturally sensitive" event featuring a smoking ceremony on January 26. Adopt a communications plan that focuses on "broader community education to help people better understand Aboriginal community experiences of January 26".

Adopt a communications plan that focuses on "broader community education to help people better understand Aboriginal community experiences of January 26". Refer to the day as "January 26" until another term is adopted nationally.

Refer to the day as "January 26" until another term is adopted nationally. Officially support the #changethedate campaign in council publications and social media.

Officially support the #changethedate campaign in council publications and social media. Consider ways to lobby the Federal Government to change the date of Australia Day.

Councillors from the City of Yarra will decide on sweeping changes to the event to "acknowledge the loss of culture, language and identity felt by the Aboriginal community on January 26".

If passed, they could be the most extensive range of changes to Australia Day celebrations any council has undertaken.

City of Yarra Mayor Amanda Stone, a Greens councillor, said she consulted several Indigenous leaders before raising the potential for changes back in January.

"We've had discussions with the Indigenous community about the sense of loss and anger and sadness about not just the history, about what January 26 means to them," she said.

"Our officers have since been engaging with the Indigenous community and non-Indigenous people with random, on-the-spot surveys."

Cr Stone said ending all references to Australia Day was in line with what Indigenous communities had been telling her about taking "small steps".

"That was something that came through from the Aboriginal community really strongly," Cr Stone said.

"That associating January 26, which is a day that represents dispossession for them, with a day of national celebration is incongruous.

"So their strong desire is to engage in education rather than big bold steps."

The City of Yarra takes in the suburbs including Richmond, Carlton North, Collingwood and Fitzroy, where several Indigenous groups are based.

It is also home to large Australia Day celebrations, particularly in Fitzroy's Edinburgh Gardens.

It was incongruous to celebrate on a day that signifies Indigenous dispossession, Cr Stone said. ( ABC News: Margaret Burin )

Cr Stone said while she hoped the date of Australia Day would be changed, she did not expect celebrations within the council's areas to be significantly affected.

"I can't see that gathering will change in the short-term, but perhaps people will have more of a think about what Australia Day is and means on January 26," Cr Stone said.

"We don't have the authority to change the name. We don't have the authority to change the date.

"That's a big process. But we cannot refer to that date as Australia Day, which is a day that is associated with great loss and sadness in the community."

Cr Stone said neighbouring councils, including Darebin and Moreland, were considering similar changes.

"The City of Fremantle did something similar [late last year] but they created a different kind of celebration on a different day.

"What they haven't done is change their citizenship ceremony, which is a contentious point."

The Mayor said the council did not have the authority to change the name of the day. ( ABC Open contributor marianmartinphotographyaus )

Critics should 'chill'

Socialist Alliance councillor Stephen Jolly said he felt the day marked "invasion" and he supported the recommendations.

"I feel that the proposed changes are thought out and backed by evidence," he said.

"No-one should really be jumping up and down about it.

"Indigenous people are telling us that they see [Australia Day] very differently, they see it as 'invasion day'.

"For those people who want to wave their flags and have their barbies, no-one is stopping them, but in fact thousands come to celebrate.

"The people that might be criticising us for this, they just need to chill about it.

"All we're trying to say that there is another way of approaching the day and their voices need to be heard to because for a long time they haven't been heard."

The public meeting will take place at the Richmond Town Hall after 7:00pm.

The Yarra Council is made up four Greens members, two Labor party representatives, two independents and a member of the Socialist Alliance.