Islamic leader Sheikh Shady Alsuleiman released a statement on Friday, condemning media reports he previously made comments that gay people should be stoned to death.
It comes on the same day Prime Minister Malcolm Turnbull said he regretted inviting Alsuleiman to an iftar, the fast-breaking meal during Ramadan, at Kirribilli on Thursday night.
"Had I known that the sheikh had made those remarks he would not have been invited to the iftar," Mr Turnbull told 3AW radio in Melbourne on Friday.
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In a statement released this evening Mr Alsuleiman said: "I unequivocally reject the claim that I called for the stoning or any form of punishment of adulterers and/or homosexuals."
However he did not deny claiming that homosexuality spread HIV/AIDS and other diseases after video of the claims emerged online in one of his sermons.
"As an Australian and a Muslim, I unreservedly condemn the vilification and oppression of any group of people based on race, religion, gender, sexuality, or any other criteria for that matter," he added.
Mr Alsuleiman concluded by saying as Australians "we have and will always show mutual respect for one another".
"In light of the above, there is absolutely no place for homophobia or any sort of hatred or discrimination towards a person who identifies as LGBTI," he said.
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Cabinet minister Christopher Pyne said mistakes were made on the invitations to the Kirribilli dinner, but the prime minister was quick to condemn the views as soon as he was aware the preacher was attending.
Senior Labor frontbencher Anthony Albanese said it was a stuff-up that shouldn't be blamed on Mr Turnbull.
"I do think it's a good thing that the prime minister had an Iftar dinner and I don't believe you can hold the prime minister permanently responsible for everyone who is invited."
During the dinner Mr Turnbull emphasised the importance of tolerance, saying acts of terror like Sunday's massacre in Orlando were perpetrated to divide along lines of race, religion, sect and sexuality - but that kind of hatred and division must not prevail.
