A growing ACT Muslim community will move the location of their planned mosque from Rivett to avoid antagonising traders in the area.
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The new place of worship, which was revealed by the Sunday Canberra Times in November, was planned to hold about 100 people as well as a library and a missionary house.
The Ahmadiyya Muslim Association of the ACT went back to the government in December to ask for another location to build their new place of worship after the proposal divided shopowners and residents over parking, construction and vandalism issues.
"We are a peace-loving community and we realised that the neighbours and the shopowners felt that they will [have] limited parking," president Mohammad Hasan said.
"We wanted them to remain happy as they are."
Mr Hasan said the government had suggested a new block of land in an industrial area which would be more than twice the size of the Rivett land, allowing more room for parking.
"We are happy so far, we have had good meetings with the government," Mr Hasan said.
"[They] have been very supportive and helpful.
"We want the community not to be disturbed or affected in anyway."
Rivett shopowner Brigid Mulligan, who owns XS Hair, said the Rivett shops had never been the right place for the development.
"It's not because they're Muslim, it's because of the people here," she said.
"The poor guys would have been graffitied every week – it's just not the right place for it,"
Ms Mulligan said she was happy the asociation had taken community concerns onboard.
"They didn't have to, they could have fought this to the end but it wouldn't have been good for them," she said.
"It's very sad. Seriously they should be able to go anywhere and not upset anyone."
Molonglo Liberal MLA Giulia Jones said the announcement meant the association would be now offered the right site to suit their needs.
"This is a win for the Ahmadiyya Muslim Association and their community who had the courage to go back to the government and ask for a more suitable site after the government had pretended that this was the only site available," she said.
But Ms Jones said there still needed to be more work done on the Rivett shops, which she claimed the ACT government was still ignoring after more than a decade.
Mr Hasan said the association was in discussions with ACT Planning and Land Authority to buy a new block.
He said he was hopeful construction would start by the end of 2015.
