About 300 protesters rallied outside the Australian Homelessness Conference at the Darwin Convention Centre on Wednesday to demand the YiSSA short-stay accommodation centre not close as planned on Sunday.
The Darwin centre holds up to 400 mainly Aboriginal residents including domestic violence survivors and people from remote communities who need access to life-saving medical treatment such as kidney dialysis.
The Northern Territory government plan is to move the residents to demountables in the township of Batchelor, 100km south of Darwin.
The government decided to close the shelter despite the federal government offering to pay $3.5 million towards a shared-purchase arrangement to keep it open.
Federal Minister for Aboriginal Australians, Malarndirri McCarthy, said there were more than 120 people in the facility who had not found anywhere to go.
She urged the NT government to extend the centre's life for at least six months, to beyond the wet season, so a long-term plan could be worked out for vulnerable families.
"There's an urgency for these families, and I just ask the Northern Territory government to reconsider the offer of the Commonwealth," Senator McCarthy said.
Homelessness Australia CEO Kate Colvin said it was outrageous to close such a critical facility when it would only lead to a spike in rough sleeping in a city of rising rents.
"Having crisis accommodation means people have safe shelter while they're trying to find housing," she told reporters.
The NT has the highest rate of homelessness in Australia, with more than 13,000 people experiencing homelessness on any given night, about 87 per cent of them Aboriginal.
Batchelor resident Maemae Morrison told AAP her community lacked the services and amenities to cope with an influx of vulnerable people.
Authorities had not consulted with the council, the community of about 300 people or Traditional Owners, she said.
The NT government has made assurances it would not shift medically vulnerable YiSSA residents away from their services.
Children and Families Minister Robyn Cahill has told reporters NT Health was working to find accommodation for YiSSA dialysis patients close to services in Darwin.
NT Opposition Leader Selina Uibo said the Country Liberal Party government had said the closure was about cost and conditions attached to the offered Commonwealth funding.
But the government's own figures showed $12.7 million would purchase the YiSSA site and operate the 300-room service for a year.
In comparison, $18.2 million in public funding was attached to the Batchelor model for about 150 rooms, Ms Uibo said.
"That is $5.5 million more for a temporary service with half the room capacity."
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