Sarah Ferguson could lose her honorary "Freedom of the City of York" as the council considers a motion to strip her of the title at its next full meeting in November.
The Duchess of York was granted the honour alongside Prince Andrew in 1987 as a wedding gift. Andrew lost his freedom of the city in 2022 after settling a civil sexual assault case with Virginia Giuffre.
Leader of City of York Council, Councillor Claire Douglas, told the Mail: "A Full Council meeting of all City of York councillors next takes place in November.
"Consideration will be given in advance of that meeting to whether a motion to remove the Honorary Freedom title from the Duchess of York is tabled. The Honorary Freedom title conferred on the Duke of York was removed in 2022."
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Cllr Douglas added: "We deplore the links and continued associations with Jeffrey Epstein by those carrying the York title beyond the time the gravity of his crimes became clear."
Fergie has faced renewed scrutiny over her ties to Epstein, whom she once described as her "supreme friend."
It was revealed that she privately apologised to the convicted sex offender after pledging to cut ties, writing to him that she spoke out only to "save her career as a children's author."
The Duchess said in the letter that it came "from the truth of my heart" and called Epstein a "steadfast, generous and supreme friend," despite earlier telling journalists: "I will never have anything to do with [Epstein] again."
Sarah Ferguson has been dropped by several charities where she served as patron | GETTYSources have claimed Fergie and Andrew have been told to stay away from Royal Family Christmas celebrations following the latest controversy.
King Charles, 76, is said to want to keep the Duke and Duchess of York, both 65, at arm's length.
A source told The Sunday Times: "You can't sack someone from being your brother.
"But this year, if the duke and duchess were both to be as honourable [as last year], it would be very much for the best and the family would not be disappointed, not least to avoid the King having to make any more difficult decisions."
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Sources close to the King said he prefers the Yorks to 'keep out of sight'
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Friends of the Duchess said she was "devastated for any embarrassment" caused and "will explain herself to the wider Royal Family in due course."
Sources close to the King said he prefers the Yorks to "keep out of sight" at royal events and arrive or leave through discreet entrances.
Earlier this month, Andrew and Fergie attended the Duchess of Kent's funeral at Westminster Cathedral, where Andrew was seen laughing and appeared to approach Prince William, who did not engage.
The Prince of Wales is understood to view his uncle as a "risk" and "threat" to the monarch and supports the King's position.