Transgender advocate Catherine McGregor has apologised to the National Australia Day Council after labelling David Morrison's Australian of the Year win a "weak and conventional choice".

Lieutenant General Morrison was named 2016 Australian of the Year on Monday night.

Ms McGregor was a finalist and was named Queensland Australian of the Year for her work as a gender diversity advocate.

The former Army lieutenant colonel became an advocate for transgender Australians after announcing in 2012 that she was changing her gender, moving from Malcolm to Catherine.

She has regularly spoken about her experiences at forums, writers' festivals, in magazines as well as on the ABC's Australian Story.

While working as a speech writer for Lieutenant General Morrison, Ms McGregor wrote the powerful anti-discrimination message that launched the former Army chief into the spotlight.

In an interview with gay and lesbian publication the Star Observer, she said she was "sad" that the Australian of the Year accolade went to Lieutenant General Morrison and not her.

"I felt really sad that they did not have the courage to go with an LGBTI person," she told the publication.

"I thought it was time.

"It was a weak and conventional choice."

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In a series of tweets, Ms McGregor apologised to the selection committee and Lieutenant General Morrison.

"I am entrely [sic] accountable for this and withdraw this aspersion unreservedly," she wrote in one tweet.

"My language was wrong," she went on to say.

Ms McGregor also clarified that she thought Lieutenant General Morrison deserved the credit for his rousing YouTube speech, not her.

"I also made it clear that HE not ME deserved the credit for his YouTube speech in 2013," she wrote.

In a statement, the National Australia Day Council Board said it was "very disappointed" by the initial comments.

"The board stands by its decision to select David Morrison as the 2016 Australian of the Year as a champion of diversity and for marginalised communities in Australia, including the LGBTI community," the statement said.