The 'Freedom of Oxford' had been granted to the de facto leader of Myanmar in 1997 for her "long struggle for democracy" by the Oxford City Council.
A cross-party motion was unanimously passed by the council yesterday which said it was "no longer appropriate" for her to hold the honour.
Oxford City Council leader Bob Price supported the motion to remove her honour and confirmed it was an "unprecedented step" for the local authority.
The city council will hold a special meeting to confirm that the honour is removed on November 27.
Suu Kyi, winner of the Nobel Peace Prize, has close links to the city of Oxford, having lived in Park Town with her family and earlier attended St Hugh's College from 1964 until 1967.
The city council's move comes days after her alma mater, St Hugh's, removed her portrait from the main college entrance.
While the exact reasons for the portrait's removal were attributed to a new replacement, there is a wider view that the allegations of ethnic cleansing of the Rohingya Muslims fleeing their homes to Bangladesh is likely to be behind the move.
Nearly 500,000 people belonging to Myanmar's Rohingya minority have been displaced after violence allegedly instigated by the country's military, causing a major humanitarian crisis.
Suu Kyi has been Myanmar's State Counsellor, a position similar to prime minister, since April, 2016.
She spent years under house arrest as a campaigner for democracy while Myanmar was ruled by a military dictatorship.
She became a worldwide icon for freedom before leading her National League for Democracy to victory in open elections in November, 2015.
The UK government has made repeated calls for her take a more firm stance on the violence being suffered by the Rohingyas.