An ACT Muslim group, which intends to construct a new mosque at the Rivett shops, says it plans to build a state-of-the-art building, open to the public and preaching "love for all, hatred for none".
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But the new development has divided shopowners and residents who say they are concerned over parking, construction and vandalism at the new building.
The ACT cabinet approved the block sale in March to the association's ACT branch, which intends to build a place of worship.
A development application has not yet been submitted to the ACT Planning and Land Authority for assessment.
Residents will be able to put in submissions during the public notification period.
Ahmadiyya Muslim Association Australia ACT branch president Mohammad Hasan said the new mosque would hold prayers for about 100 people on Fridays and feature a library which would be open to the public.
"We will also be organising multicultural events from there as well. It won't [just] be used by members of our community, we will from time to time organise symposiums where we will invite the leaders of other religious groups," he said.
He said his group's old premises in the Griffin Centre had become too small to accommodate its growing congregation.
"[This area] was allocated to us by the ACT government. We didn't have any options, they said 'this is what is available and if you want it you can accept it, otherwise leave it'," Mr Hasan said.
XS Hair owner Brigid Mulligan, who is based at Rivett shops, discovered the land had been sold only when she spoke to a fellow store owner on Friday.
She said she had a number of concerns about the new development including parking, construction and increased vandalism.
"The car park will be taken over every Friday ... you have to do something otherwise we'll all run out of car parking and that's one of the things for our clients - that they always have a car park," Ms Mulligan said.
She said her clients and other residents weren't happy about the development and she was considering starting a petition against it.
Body Balancing Therapies owner Michael Campbell said as there were a large number of religious and community services nearby, parking would be a major issue.
"I'm open-minded to any faith, but we've got limited facilities for access to and from areas and where you have three major community facilities in one place ... where the hell do you find a park to get to it?" he said.
"Some community thing [on that spot] would be great but this isn't community, this isn't going to help us," Ms Mulligan said.
But Mr Hasan insisted the association wanted to be of benefit to the community.
"I can assure you that we are a peace-loving community and our motto is 'love for all, hatred for none'," he said.
"Our mosque will be a place where nothing but the message of peace and love and brotherhood will be preached on a daily basis."
Economic Development Minister Andrew Barr said the sale of the land had been considered and approved by cabinet for development as a place of worship.
"The landowners are now required to submit a development application to the Environment and Planning Directorate for approval," he said.
"This will contain details of parking and traffic management and will be available for public comment."
