Merton College is selling the 1.66 acre site which is the last open greenfield area in central Oxford. To the east, the new development will border the river Cherwell and overshadow a listed cottage used by the poet Dylan Thomas.
The Centre, intended for use by around 100 fellows and students of the Islamic world, is designed by one of the world's leading Muslim architects, the Egyptian Abdel Wahed Al- Wakil, and could be one of the most important buildings built in Oxford this century. Its Islamic style is raising eyebrows, given its sensitive position at the heart of one of English architecture's greatest treasures - the medieval university city of Oxford.
One view, as expressed by David Townsend of the Oxford Civic Society, is that doesn't fit in. "To my western eye", he says, "it's not what I'd call beautiful."
To Moira Haynes of the Oxford Preservation Trust the worry is the way the building will affect the architectural balance of the location. "It'll completely alter the character of the site," she says.
Academically the Centre will also be under scrutiny. Concerns about its independence stem from its funding sources - principally the royal houses of Saudi Arabia and Brunei. Saudi Arabia's extremely austere Whahabi brand of Islam is intolerant of any questioning of its orthodoxy.
David Browning, the Centre's registrar, maintains it is "totally independent" and that it aims to contribute to "international understanding and dialogue". But many are sceptical that reliance on Saudi funding can encourage the freedom of thought and objective study of Muslim society that has traditionally held sway in Oxford. The Centre, some critics say, is more to promote Islam than to study it. More bluntly, as one senior don put it, "it could provide a barrier to free scholarship".
The Centre is only an institution recognised by the university, not a fully fledged college, but its immense resources mean that its influence in Oxford and the world of Islamic Studies is growing. Already the Centre has funded a Prince of Wales chair for Study of the Islamic World at the university, held by the the centre's own director, Farhan Nizami. (Prince Charles has been an enthusiastic patron of the Centre and its stated aim of increasing understanding of Islam in the West.)
The Centre's prestige will no doubt also be enhanced by Al-Wakil's new building. King Fahad of Saudi Arabia acknowledged its signifiance as a showcase of Islamic culture and learning by agreeing to fund whatever the cost. "I want a jewel," he is reported to have said.
The multi-million pound building will spare no expense in materials and detail. Well aware that architectural controversy could be as damaging to the centre as academic questions, the design goes out of its way to marry traditional Islamic motifs with the gothic style typical of Oxford. The dome of the mosque (or "prayer hall" as the Centre's official euphemism goes), recalls the dome of the University Library's Radcliffe Camera. The mosque's minaret with its Moroccan elements has the feel of the gothic spires found on many college chapels.
Kate Miller, the Oxford Civic Society's planning secretary, has some reservations about the building. "The style's a bit confused", she said. "It mixes gothic and Islamic. But then look at Venice. That mixes the two styles and no one complains."
Abdel Wahed Al-Wakil's garden courtyards seem to borrow as much from the fountained gardens of the moorish Alhambra palace as the Christian cloisters of Oxford, but as his design takes pains to emphasise, the two are not so far apart. The centre has already arranged for an exhibition to be mounted in Oxford demonstrating the close kinship between the styles.
Even the basic design of the Centre - essentially bedrooms, library, refectory and place of worship built around inward-looking quadrangles - is that of a typical Oxford college. In this case the two main garden quads are linked by an intimate courtyard with (another touch of the Alhambra here) intricate, asymetrical arcades.
The collegiate university model itself is originally Islamic. It was picked up by the medieval west in the 12th century and flowered into the great universities at Paris, Bologna and Oxford. The arched cloister quad- rangle of the college where the medieval Christian masters held forth is the twin of the mosque's arched courtyard where the Islamic teacher held his classes. Even the pointed moorish arches of Al-Wakil's design mirror Oxford's ubiquitous gothic arches.
So far, the diplomatic design and the softly-softly approach of the Centre's staff have averted any storm such as the one that scuppered the last major Oxford project using Arab money, the proposed business school funded by the Syrian Wafic Said.