The board of the Al-Hiali's Lakemba mosque association had met with the cleric and decided afterward to accept his apology for the comments, the mosque's spokesman said on Thursday.
The spokesman also said that the Muslim cleric would not deliver sermons for two or three months.
Toufic Zreika, the association president, said the board was "basically satisfied with the notion that certain statements made by the mufti was misrepresented and the mufti was misinterpreted".
"Obviously those comments have been made, but he provided us with an unequivocal apology for saying so," Zreika told Australian Broadcasting Corporation radio.
The decision prompted further condemnation.
"I think this is a slap on the wrist," said Pru Goward, Australia's sex discrimination commissioner on Friday, a day after she accused Hilali of inciting rape.
Hilali apologised for any offence he had caused in making the comments a month ago during a sermon marking the holy month of Ramadan, after they were printed in The Australian newspaper.
In a translation from Arabic by the newspaper, later verified by other media, Hilali was quoted as saying: "If you take out uncovered meat and place it outside ... and the cats come to eat it ... whose fault is it, the cats' or the uncovered meat's?"
"The uncovered meat is the problem. If she was in her room, in her home, in her hijab, no problem would have occurred," he was quoted as saying, referring to the head scarf worn by some Muslim women.
John Howard, the prime minister, and others denounced Hilali's remarks as blaming women for rape, and there were growing calls for the cleric to quit or be removed from his high-profile role as mufti in the faith.
Howard said the comments were "appalling and reprehensible".
"The idea that women are to blame for rapes is preposterous," he told reporters.
Hilali has also faced pressure from within Australia's Muslim community, which numbers nearly 300,000 in a mostly Christian population of around 20 million.
Alia Karaman, a female member of a leaders' group at Gallipoli Mosque in Sydney, said: "Whether he steps down or not, I think it's time for Australia's Muslim faith to have a religious leader who has a better understanding of Australian laws, Australian values, and the Australian way of life."