The Landmarks Preservation Commission's decision allows organizers to transform the 152-year-old building into an Islamic community center blocks from the site of the Sept. 11 attacks.
National and New York politicians and the Anti-Defamation League have come out in recent weeks against plans for the mosque, saying it disrespects the memory of Sept. 11 victims. Mayor Michael Bloomberg has supported the mosque.
The commission voted 9-0 against granting landmark status to the building.
Commissioners said the building didn't meet historic criteria to qualify as a landmark.