The group rejects Bill C-33, the government's proposed education legislation, but said it is willing to negotiate a new deal.
The assembly has been in disarray since the sudden resignation two weeks ago of national chief Shawn Atleo over the education issue and the controversial bill.
The special Confederacy of Nations says it has assumed full control of all matters relating to education and Bill C-33 and will report to a special chiefs assembly on May 27.
The government has put the bill on hold until it gets a united and clear position from First Nations.
"This historic meeting of the Confederacy of Nations sees our leaders from across the country come together in unity to discuss the federal education bill and, as anticipated, it was unanimously rejected," said Chief Isadore Day of Serpent River First Nation in northern Ontario.
"This historical meeting of our leaders is necessary and aims at unifying on a single cause and are providing direction on the future of the education of our children and the future of our nations."
Day and others invoked assembly charter provisions to let the confederacy step in and give ordinary First Nations a say in the issue.
The charter says one of the many reasons for the confederacy's existence is to "address any emergency in matters of a fundamental nature affecting one or more First Nations."
Until this week, the governing body had been dormant for a decade, but now it has risen up to take control of the education issue.
Day said the issue has basically been a matter of dickering between Atleo and Indian Affairs Minister Bernard Valcourt.
"I think this gives the grass roots some level of assurance that we are dealing with the bill in a more direct manner, versus polticking between two or three men," Day said.
"Up to this point, the minister of Aboriginal Affairs and the national chief's office have unilaterally pushed Bill C-33," Day said. "Where the executive has not been able to stand prudent on behalf of First Nations, the Confederacy reps will assert and stand firm."
He said Atleo mishandled the file.
But Valcourt has called the confederacy a group of "rogue chiefs."
Chief Gordon Beardy of Muskrat Dam in Ontario called those comments ill-informed and disappointing.
He said the confederacy was a legitimate gathering of leaders as mandated in the assembly's charter.
"The representative delegates of the confederacy agreed to not only reject Bill C-33 but to form a committee to enter into discussions with the minister on a viable alternative to the bill," Beardy said.
Day echoed that: "We are going to ensure that the bill remains on hold until such time that a really good look is done here."