Federal Greens MP Adam Bandt has offered to step in and personally conduct citizenship ceremonies in the City of Yarra throughout the year after the Prime Minister stripped the Greens-dominated council of its powers yesterday.

Under law, any Federal Government MP has the right to officiate in any citizenship ceremony, meaning they can receive the formal "pledge of commitment" from a would-be citizen.

Mr Bandt, who praised the council's decision to drop all references to Australia Day and cancel its annual citizenship ceremony on the day, would need to make a request to the Immigration Department to arrange the ceremonies.

"The Prime Minister's response yesterday was overreach and fevered and it shows he has no agenda of his own and is now trying to start a culture by overreacting to a very sensible decision," Mr Bandt said.

"If the Prime Minister is willing to take away their rights, I am offering to step in and conduct the ceremonies myself and invite all of the councillors along so they can continue to take place in the electorate.

"Unless the Federal Parliament starts picking and choosing who can conduct these ceremonies, I have the right to do this and I make it as a standing offer to the council."

Yarra council voted to: 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.

On Wednesday, the Government said the Immigration Department would hold citizenship ceremonies in the City of Yarra instead of the council.

"We will ensure prospective citizens with the City of Yarra are allocated to citizenship ceremonies [in other council areas] and the Department of Immigration and Border Control will hold ceremonies within the City of Yarra as demand requires, including on Australia Day next year," an official statement read.

Assistant Minister for Immigration Alex Hawke said Yarra Council was using citizenship ceremonies as a political device and had breached their powers in doing so.

"We are committed to ensuring that citizenship is treated in the 'non-commercial, apolitical, bipartisan and secular manner' which the code mandates," Mr Hawke said.

'It's just going to come back and back'

On Wednesday, the Prime Minister accused the Yarra Council of being "divisive".

"An attack on Australia Day is a repudiation of the values the day celebrates: freedom, a fair go, mateship and diversity," Malcolm Turnbull said in a statement.

"I recognise Australia Day, and its history, is complex for many Indigenous Australians but the overwhelming majority of Australians believe the 26th of January is the day and should remain our national day."

But Mr Bandt hopes the Coalition will eventually hand back the ceremony rights to the council.

"I'm actually hoping the Government backs down on the decision once people realise that the Yarra Council is taking a very reasonable step and they're not trying to politicise the ceremonies they conduct," he said.

"It's not just going to be Yarra — many councils have said that they have considered making similar moves towards this.

"It's a movement that's gaining support, so if the Prime Minister thinks standing up to one council is going to make the issue go away, it's not. It's just going to come back and back and back."

Mr Hawke declined to respond to Mr Bandt's comments.