Mayor Carson Taylor is establishing the holiday on the second Monday in October to coincide with the federally recognized Columbus Day.
Carson's proclamation calls the federal holiday an affront to people indigenous to the Americas and says the city celebrates their resilience in the face of genocide. It states that the city recognizes American Indian history and its cultural influences to the community.
Each Indigenous People's Day in Bozeman, a special presentation on indigenous culture will be made in front of the city commission.
Taylor hopes this will allow more people to not only acknowledge cultural differences but also bring people together.
"My goal is that this is the beginning of better understanding between indigenous people that came from Montana and those who are relative newcomers in the last 150 years. I hope to build those relationships to the benefit of all of us," explained Taylor.
Supporters of the change filled the commission chamber in January.
Montana Racial Equity Project executive director Judith Heilman said racism is an ongoing tragedy.
At least nine cities celebrated Indigenous People's Day for the first time last year, including Albuquerque, New Mexico, and Portland, Oregon.