The Ahmadiyya Muslim Association has been offered a block of land near the Narrabundah ball park for the place of worship, pending development application approval, community services minister Chris Steel told the Economic Development Directorate annual reports hearing.

The decision comes after a five-year search by the Ahmadiyya Muslim Association for a site in Canberra for a dedicated facility.

After years of uncertainty, the association's ACT president Khalid Syed said the news came as a relief.

"The mosque is central to our cultural activities, and having a mosque in Canberra really means a lot to us," Mr Syed said.

"We're looking forward to having a proper mosque where kids can come, and people can come to pray and invite guests. It's almost a community centre to us."

While the government wouldn't put a timeframe on the development, Mr Syed said he hoped to submit the development application by January, with work to begin shortly after approval.

"Progress has been a bit slow, because we're a charitable community and our workers are all volunteers, and there's a lot of back and forth between us and offices in Sydney," Mr Syed said.

"There are some fine tunings to be done and then the plan has to then be approved by the Ahmadiyya national office Sydney and the global office in the UK."

Temporary locations have been set up for prayer services in the past, with the denomination currently worshipping out of a hired office space in Fyshwick.

"We currently have a large hall that's subdivided into two, one for the men and one for the women," Mr Syed said.

The proposed mosque will provide the community with a dedicated space to worship, and is expected to be similar in style to those already built in NSW and Queensland, but smaller in scale.

The mosque would include space for more than 100 worshippers and a car park.

Mr Steel said the site neighbours the Spanish-Australian Club, the Best Western hotel and the Narrabundah ball park area.

"They're now in the process of developing a development application, and once the DA is approved, the direct sale [of the block] will be concluded and they'll be able to start construction,"Mr Steel said.

"They're pretty pleased it's coming to a conclusion."

Sustainability and Built Environment deputy director-general Geoffrey Rutledge said it was now up to the association to progress their plans.

"We're working with them to make sure the site is suitable for the various coming and goings and to also maintain the ball park, which is a growing spectator sport, so we think we've got the right site for them," Mr Rutledge said.

A mosque was first planned to be built near the Rivett shops in March 2014, but that was abandoned following concerns from residents and nearby store owners.

A site in Hume was then proposed by the government in 2015, but the Land Development Agency deemed it unsuitable.

Ahmadiyya Muslims are considered controversial in the Islamic world due to beliefs that other denominations regard as heretical. Those in the religious denomination have been persecuted overseas, while Ahmadis have been declared non-Muslims in Pakistan.