Australian citizenship ceremonies no longer have to be held on January 26, the federal government announced on Friday.

The federal government's decision changes the code that governs when the ceremonies can be held and reverses a decision from the previous Coalition government which compelled councils to hold the ceremonies on Invasion Day.

In 2023, local councils will be allowed to hold citizenship ceremonies in the period from January 23 to 29.

The Minister for Immigration, Citizenship and Multicultural Affairs Andrew Giles also announced the reinstatement of the City of Yarra and Darebin City Councils' authority to conduct citizenship ceremonies.

The two councils were stripped of their powers to hold citizenship ceremonies at all after they both voted to scrap citizenship ceremonies on January 26 in protest over what the date signifies for First Nations people.

At the time of publication, the Darebin City Council have yet to receive official notification advising their ability to hold ceremonies again but said they welcome this decision.

"In June 2022, councillors made a unanimous decision to commence advocacy to the new Federal Government to hold citizenship ceremonies in a positive and timely way on dates other than 26 January," their statement said.

"It made a resolution to work with the Federal Government through the Minister for Indigenous Australians, and the Minister for Immigration, Citizenship and Multicultural Affairs to enable Council to fulfil its obligations in conferring citizenship on their residents on days other than the 26 January.

"Councillors also agreed to seek involvement from the Traditional Owners and the Darebin Aboriginal Advisory Committee in the formation and delivery of any future citizenship ceremonies."

This decision from the federal government comes as another Victorian council, the Merri-bek Council announced it was no longer holding citizenship ceremonies on January 26.

National Indigenous Times has contacted City of Yarra for comment.

Pro Vice Chancellor at Monash University and Noongar man Tristan Kennedy said this allows more of an awareness around Indigenous history.

"This move clearly acknowledges the discomfort experienced by Indigenous Australians around January 26," he said.

"Allowing local councils to exercise discretion on this issue responds to the growing awareness of Indigenous history and culture amongst many in our communities."

Mr Giles said removing the red tape around holding citizenship ceremonies is in an attempt to uphold the important common bond for all Australians.

"It is the Australian Government's strong expectation that councils conduct ceremonies on January 26," he said.

"The Australian Government implores councils to have new citizens as their key focus, recognising that many community members want to complete their journey to Australian citizenship in connection with Australia Day."