Melbourne Lord Mayor Robert Doyle has welcomed the prospect of a large mosque being built in the CBD, following claims demand for prayer space is outstripping supply.

Cr Doyle said Melbourne was one of the great multicultural cities of the world and agreed there was a need for a bigger site.

The Islamic Council of Victoria that it wants to create a mosque for more than 2000 worshippers. Credit:Neil Newitt

"I think a mosque would be a wonderful addition to multicultural Melbourne," he said.

"We have a wonderful Islamic community in Melbourne and as far as I'm concerned, they are most welcome in the centre of our city."