The Hobart Anzac Day committee says there are alternatives to german shepherd dogs participating in the march on Monday.
Annette Batchelor wanted to march wearing her grandparents' medals, with her two shepherds to honour dog handlers and their animals.
But she was rejected on the grounds the breed was used to patrol prisoner-of-war camps and some former POWs or people from other cultures may be offended.
The president of the Hobart Anzac Day Committee, Mike Priest, says instead Ms Batchelor is marching with her dogs in the Glenorchy parade.
"The committee's made a decision, there's nothing I can do about that.
"But if she likes to contact me after this parade in Hobart, I'm sure we can work out a banner that would be appropriate with recognising the dogs and that could be paraded."