A Sydney council is considering scrapping Australia Day celebrations and instead encouraging residents to attend the Aboriginal Yabun festival, in an effort to mark January 26 in a way that's more respectful’ to the indigenous community.

Labor Mayor Darcy Byrne says for Aboriginal people, January 26 marks the beginning of colonisation, dispossession, the removal of children and deliberate destruction of language and culture. 

“The community is becoming more aware of those facts and as a result attitudes to and the meaning of Australia Day is changing,” Mr Byrne said. 

Inner West councilors will vote next Tuesday on the proposal.