The protesters had intended to meet at Sydney's Town Hall before marching on to the US Consulate building at Martin Place, less than a kilometre away.
The protest is in aid of free speech after several high profile organisations withdrew their support from Wikileaks and to shine light on Julian Assange's recent arrest in London.
The letter — sent directly to Pirate Party member Rodney Serkowski from M.J. Murdoch, assistant commissioner and commander of Central Metropolitan Region — said that under Section 23 of the Summary Offences Act, the rally must be authorised by a court to be protected against various offences.
The assistant commissioner added that without a court notice authorising the rally, protesters and organisers would not have the support of the NSW Police Service.
"Under Section 26 of the Summary Offences Act, I am advising you that I oppose the holding of your public assembly," the assistant commissioner said in his correspondence.
"Please note that without an authorised public assembly you do not have protection for obstruction type offences," Murdoch added.
Serkowski is disgusted and disappointed by the letter, and claimed that the NSW Police cited Oprah Winfrey's Sydney visit as one of the reasons it could not lend its support to the rally.
The Australian Pirate Party told its followers via social messaging service Twitter that it is still working with the NSW Police to ensure public safety, despite the commissioner's opposition of the rally.
This latest rally marks the second protest in Sydney against Julian Assange's imprisonment, with the first attracting over 1000 attendees.