The march is due to take place on Saturday afternoon ahead of the official Gay and Lesbian Mardi Gras, which has been moved to the Sydney Cricket Ground due to COVID-19.

A NSW Police spokeswoman confirmed the protest had been deemed unauthorised as it proposed to draw well over the number of people allowed to attend political gatherings under current COVID-19 rules.

"As such the commissioner has applied to NSW Supreme Court to prohibit the assembly," she said.

The current limit on political gatherings is 500. More than 1000 people have already RSVPed to attend the march, with another 3000 interested.

Activist group Pride In Protest is among those organising the community march which plans to take the route of the original 1978 march down Oxford Street to Hyde Park.

They say the move is typical of the police force, which has made a tradition out of suppressing and oppressing the voices of the queer community since the first Mardi Gras in 1978.

Pride In Protest spokesman Toby Walmsley on Tuesday told AAP the march would go ahead anyway with COVID safety measures.

It's estimated that about 10,000 people will attend the ticketed Mardi Gras parade at the SCG.

Mr Walmsely said the march down Oxford Street had been organised because the SCG event didn't represent what Mardi Gras should be about.

"The SCG event is a paid event and we believe the essence of Mardi Gras is political and about fighting for our rights today," he said on Tuesday.

"We don't believe the SCG event is in the true spirit of Mardi Gras."

Australian Associated Press