Myanmar's de facto leader was bestowed with the honorary title in 1997 in recognition of her long struggle for democracy and her ties to Oxford where she studied.
City councilors considered a cross-party motion to withdraw the honor on Monday night and concluded that that it was "no longer appropriate" for her to hold it.
The council said that it had written to Suu Kyi and asked her to "do whatever she can to stop the ethnic cleansing in her country" but had not received a response.
Over the years, Suu Kyi has often spoken of the warmth and kindness she received during her time in Britain.
It was while studying at Oxford University between 1964 and 1967 that she met her late husband, Michael Aris, before starting a family there.
Labour Party Councilor Mary Clarkson, who put forward the motion, told the council that Suu Kyi's lack of response and dismissal of numerous claims of sexual violence against Rohingya women as "fake rape" were among the reasons why the honor should be revoked.
According to a statement seen by CNN, Clarkson said: "In taking action, we do so for several reasons: firstly to add our small voices to others calling for human rights and justice for the Rohingya people; secondly, to respect the long traditions of Oxford, as a diverse and humane city whose reputation is tarnished by honouring those who turn a blind eye to violence.
"Thirdly, we should bear in mind that public awards can sometimes make their recipients seem untouchable and above scrutiny when their current actions betray their previous good work."
The recommendation to withdraw the city honor will be finalized at the council's next meeting in November.