Petro on social media called Peru's decision an "act of land theft" and said the Andean nation had acted unilaterally.
He also cautioned that it could imperil the Colombian city of Leticia's river connection to the Amazon and its redevelopment as a deep-water port city.
"Diplomacy is the way our government will defend our national sovereignty," said Petro.
A Longstanding Border Dispute
The debate over who owns Santa Rosa has gone on for almost a century. It maintains that treaties signed in 1922 and 1929 uphold the island's claim, and has held administration of it for decades.
But Colombia says it did not exist when the treaties were concluded and that Santa Rosa is therefore not bound by them.
Colombia says the treaties stipulated that the border is where the river's "deepest point" is, and this has shifted due to natural sediment movement in the Amazon.
Petro says if Santa Rosa has appeared north of that line, the island should belong to his country. He also said, "With this decision that Peru made recently, it can have an effect on taking away the commercial life of Leticia," a city with nearly 60,000 residents.
Diplomacy and Sovereignty
Colombia´s Ministry of Foreign Affairs said in a statement that the only way to determine appropriateness for classification as islands is by carrying out bilateral studies.
It also stated that the Santa Rosa oil field has never been definitively assigned to Peru under any previous accord. The ministry has reasserted Colombia's intention to find a diplomatic solution.
Colombian President Petro said he would celebrate Colombia's Independence Day in Leticia to demonstrate that point of view, and the symbolic aspect of national sovereignty was relevant in the context of the fight.
Peru Defends Its Decision
But Peru has taken the opposite view, proposing to protect congressional action on the grounds that it was needed to provide federal money for Santa Rosa and allow the city itself to tax.
With the discontinued military presence on the island, its only settlement, with fewer than 1,000 residents and located near the Amazon River that Venezuela shares with Peru to form a natural border between the two countries, almost entirely revolves around tourism.
In a public statement, the Peruvian government said it is working "complying fully with international law and valid bilateral treaties."
It underscored that the naming of Santa Rosa as a district was an administratively convenient action intended to spur needed services for the community.
The Amazon River, one of the longest and most powerful rivers in the world, is constantly moving because sediment is deposited on its banks.
Over the long term on a geological scale, islands are born and pass away with emergence or subduction of the Earth´s crust.
One such place is Santa Rosa Island, where there are forests, farmland, and little settlement today because it grew from the sea floor some 30 million years ago before joining with other places along fault lines.
The spat creates fresh tension in the long-standing struggles over control of the disputed land between the two South American countries, and both stuck to their guns.
