Fremantle controversially bumped Australia Day events by two days, citing Aboriginal cultural sensitivities.
Assistant immigration minister Alex Hawke said the Commonwealth would not allow the City of Fremantle to hold citizenship ceremonies as part of its planned events on January 28 because it would give an anti-Australia Day message.
"Citizenship has got to be apolitical, non-commercial, bipartisan and secular."
The council could hold them on January 26 as normal, on any other day as long as it is not marketed as an alternative to Australia Day, or the immigration department would do them, Mr Hawke said.
"Citizenship has got to be apolitical, non-commercial, bipartisan and secular," Mr Hawke told ABC radio on Monday.
"It's really important ... we've got hundreds of councils administering this around the country ... that they don't get the idea they can use citizenship as a political football. "We're very dark on that."
Mr Hawke said the federal government was taking a firm stance but trying to resolve the matter with the council.
"We're trying to work this out," he said. "We're being reasonable."
"We don't want this to escalate into a major political situation and would prefer that they did take up the Commonwealth on one of the offers."
Fremantle Mayor Brad Pettitt confirmed he had received correspondence from the federal government and would comment later on Monday.
He said last week he didn't expect the council's decision would cause such a fuss.