Parliament decided on Tuesday to allow other religions to build places of worship without seeking approval from the Church of Greece.
The head of the Pakistani community in Greece said work on securing a licence to build a mosque would start soon.
Javied Aslmam said: "This is wonderful news for about 50,000 Pakistanis in Greece and it is a great step forward for exercising our religious rights."
About 130 cellars or warehouses currently serve as mosques for the estimated 200,000 Muslims who live in Athens.
Hindu and other groups have also used temporary places of worship while they campaigned for a change in the law.
"We welcome and support this decision by the parliament," said the president of the National Human Rights Committee, Aliki Marangopoulou.
"Granting licences must be a matter for the state and not for the Church of Greece."
Objections from the Orthodox Church and the public had blocked the building of a mosque.
Marietta Giannakou, the education and religious affairs minister, said the government has earmaked a site near the city centre.
Athens is the only EU capital without a mosque.