A Naarm-based community health provider has given its staff the choice to not recognise Thursday's snap public holiday to honour the death of Queen Elizabeth II.

Cohealth on Wednesday told its 1000 staff they could come into work on Thursday and subsitute the holiday for another day on the calendar.

The service said the decision was made to give staff the chance to recognise the ongoing impact of colonialism and the British monarchy on First Nations Australians.

Cohealth strategy, impact and development executive lead Kim Webber said the organisation would support staff whatever their views were on the situation.

"A large part of our work as a community health service is supporting the First Nations' community to overcome health inequity, discrimination and disruption of culture that is a direct result of colonisation," she said.

"By offering staff the option to substitute Thursday's public holiday for another day, we are empowering staff to make the choice that is right for them and staying true to our commitment to reconciliation and health equity.

"It is vital that we stand by our values as an organisation that is committed to ending health inequity, and advocating for the communities with which we work."

The move follows a similar decision to allow staff to substitute the Australia Day public holiday and King's Birthday.