While some Australians are set to celebrate the day, others see the date as a day of mourning.
A raft of events of both celebration and protest are planned around the country.
Early on Tuesday, a Survival Day dawn service was held in the Victorian regional city of Ballarat honouring First Nations people who died in massacres and frontier wars.
Deb Clark from the Koori Action Engagement Group said the service was live streamed due to the pandemic, and she hoped it allowed more communities across the country to be educated about the significance of the day.
“Anything that represents a day that began many of the things that changed the lives of people who came before us is not something to be celebrated,” she said.
“Yet we don’t want to focus on the negatives, we simply want to have a conversation that allows the history to be told.”
A day to be ‘thankful for being Australian’: Morrison
Prime Minister Scott Morrison says January 26 is about being thankful for being an Australian.
Mr Morrison has told Nine Radio Australians should focus on the positives.
“Of course, there are many controversial issues that go around things around this day.
“But today, it’s a day just to come together, be thankful for being Australian.
“That’s what is it. We all are [Australian], regardless of what are stories are, our experiences, our differences or disagreements that might happen.”
More than 7000 people have registered their interest in attending protests in Sydney, which are currently limited to 500 people under coronavirus restrictions.
Rally organisers submitted a request to Health Minister Brad Hazzard for an exemption to the cap.
A decision had not been made when the Aboriginal Legal Services, representing the organisers, applied to the NSW Supreme Court.
Shortly before the hearing, Health Minister Brad Hazzard refused the exemption.
Organisers of the Melbourne rally, scheduled for 10.30am (AEDT), have urged attendees to pre-register, but Premier Daniel Andrews has urged Victorians not to attend the event.
Australia Day in Melbourne is usually marked with a parade through the city, but Mr Andrews also cancelled the event to prevent potential coronavirus transmission.