The decision last month gave 51 per cent of a shrimp quota increase in Nunavut waters to the territory, with most of the rest going to Southern interests.
The GN will ask the federal courts to overturn the decision.
The government made the decision following a cabinet strategy session in Sanikiluaq last week.
Premier Paul Okalik said the GN had negotiated "in good faith" with DFO over shrimp allocations for 18 months.
"But they are still taking our fishery resources to give to outside interests," he said. "It has to stop."
The GN will argue that in making the allocation DFO contravenes the findings of the Report of the Independent Panel on Access Criteria.
Accepted last year by DFO, the report states: "No additional access should be granted to non-Nunavut interests in waters adjacent to the territory until Nunavut has achieved access to a major share of its adjacent fishery resources."
The government will also contend that the decision contravenes the Nunavut land claims agreement, which addresses adjacency and economic dependence in fisheries allocations.
The GN is also considering a separate civil action against the federal government for breach of contract.
Nunavut's overall share of the pink shrimp resource in its adjacent waters was 16 per cent before the recent allocation, and 19 per cent now.
Okalik described the DFO decision at the time as "condemning us to poverty and unemployment by giving away our resources."