The move has been described as a win not only for Queanbeyan but for Australia as a multicultural nation.

Administrator Tim Overall approved the development application at the council's meeting on Wednesday, coincidentally just a day after the beginning of Ramadan, a holy month for muslims.

Three public presenters at the meeting objected to the development citing traffic issues, however Mr Overall said the concerns had already been addressed by reducing the number of religious worshippers allowed on the site at any one time.

The proponents behind the mosque proposal, members of the Saarban Islamic Trust, originally planned the building to cater for more than 200 people. This figure was slashed by more than half to 96 to get final approval.

Mr Gaffar Khan said the Queanbeyan muslim community had been using a hired hall to pray in for many years, but they wanted a place of their own.

He said the reduced numbers allowed to visit the mosque, set to be located at 183-185 Gilmore Road, would not pose a problem initially, given they were based on a 20-year plan.

"For us, this 96 itself is a big number," he said.

"We'd be surprised if we get 60-70 people on a typical Friday afternoon, that's the only time we see people.

"Even during the month of Ramadan you would hardly see 20-30 people in our temporary location."

Another member of the Saarban Islamic Trust and Queanbeyan local, Dr Sameer Alam, said Queanbeyan's economic outlook would receive a boost from the approval.

"Many families are hanging their decision to settle in Queanbeyan on this," Dr Alam said.

"We want to have Queanbeyan as our home, a home for our children, so we want to have a place to pray," he said.

"I have three children, all born here, all studying here. As kids we always told them Australia was a multicultural society. We left our country and came here and told them Australia would welcome us, that we had a place where we could go without any fear, without any prejudice. And having a mosque is a big victory not just for them but for Australia as a whole as a multicultural nation," Dr Alam said.

Queanbeyan has a growing population of muslim residents, with more than double the number of Islamic people in 2011 than five years prior.

Statistics based on Census data show in 2006, 221 people nominated their religion as Islam and in 2011, that grew to 451 people.