''Nazinotstand' means - similar to the climate emergency - that we have a serious problem. The open democratic society is threatened,' local councillor Max Aschenbach, who tabled the motion, told the BBC on Saturday.
Aschenbach, from left-leaning satirical political party Die Partei, said he believed it was necessary to take action because politic were not doing enough to 'position themselves clearly' against the far-right.
'The request was an attempt to change that. I also wanted to know what kind of people I'm sitting with in the city council of Dresden,' he said.
The resolution acknowledges that 'right-wing extremist attitudes and actions... are occurring with increasing frequency' and calls on the city to help victims of far-right violence, protect minorities and strengthen democracy.
Aschenbach told the BBC that adopting the motion showed the city council's commitment to fostering 'a free, liberal, democratic society that protects minorities and resolutely opposes Nazis'.
Aschenbach's resolution was put to a vote by Dresden's city council on Wednesday night.
It was approved by 39 votes to 29, with Germany's governing Christian Democrats (CDU) among those to have rejected it, according to local media reports.
The CDU described the resolution as 'pure political symbolism' and said the strong wording was a 'linguistic error', German news agency DPA reported.
Germany's liberal Free Democrats (FDP) backed the legislation, but one councillor criticised the term 'Nazi emergency'.
Dresden, the capital of Saxony, has long been known for its links to the far right, the BBC reported.
In the early 1990s, neo-Nazi groups began staging rallies to remember what they called 'the bombing Holocaust', when the city was bombed by British and American forces in 1945.
The state of Saxony has also long been a stronghold of the far-right National Democratic Party of Germany (NPD) and later the far-right Alternative for Germany (AfD) party.
Dresden is also where the anti-Islam Pegida (Patriotic Europeans against the Islamisation of the West) movement began in 2014, and where it continues to hold rallies.
( With inputs from IANS )