The council also dubbed the Sheik’s comments quoted in The Australian newspaper as unacceptable.
Sheik Taj Din Al Hilaly reportedly compared "immodestly dressed" women to uncovered meat left out for animals to eat.
"If you take out uncovered meat and place it outside on the street ... without a cover, and the cats come and eat it ... whose fault is it, the cats or the uncovered meat," the sheik was quoted as telling a Sydney congregation last month.
"The uncovered meat is the problem.
"If she was in her room, in her home, in her hijab, no problem would have occurred."
A spokesman for the NSW Islamic Council, Mr Ali Roude, said he was "astonished" at the remarks, adding that Al Hilaly “had failed both himself and the Muslim community".
Sheik Al Hilaly had seriously misrepresented the teachings of Islam in his comments, Mr Roude said, which were offensive to both sexes.
The comments also showed a deep misunderstanding of rape and personal violence, which Mr Roude described as a "crimes of power".
"As a father, brother and son myself, I take offence at the portrayal of both men and women in the alleged published comments," Mr Roude said.
"Islam requires all people, men and women alike, to dress with modesty.
"This is not to reduce the risk of sexual assault and rape, but rather to show respect for the God who created us all as equals and to show respect for ourselves as people who rise above the world of mere things and animals to stand as conscious beings in the presence of that same loving God - Allah Ta'ala."
Mr Roude said he had known Sheik Al Hilaly for many years and was deeply disappointed he had made the remarks, which were in no way shared or endorsed by the council.
PM condemns comments
Australian Prime Minister John Howard has also condemned the remarks, calling them “appalling and reprehensible.”
"They are quite out of touch with contemporary values in Australia. The idea that women are to blame for rapes is preposterous. I not only reject the comments, I condemn them unconditionally," he told reporters.
Asked if the sheik should resign, Mr Howard replied: "It's not for me to say what position he should hold in the Islamic faith.
"But it is for me as prime minister to say I totally reject the notion that the way in which women dress and deport themselves can in any way be used as a semblance of justification for rape."
Muslim women angry
The United Muslim Women Association (MWA) is shocked by Al Hilaly’s comments and Maha Abdo, the manager of the association, stressed that his opinion did not reflect mainstream Muslim beliefs.
Ms Abdo is concerned that comments will spark a backlash against Muslim women, "We are constantly having to justify our position as Muslim women," she said.
"We are continually having to say Muslim women have rights. We are concerned about the consequences of the reporting today."
Ms Abdo said she "disagreed totally" with Sheik Al Hilaly's words and insisted there should be no blame on victims of sex attacks.
She also warned that his comments could confuse understanding of why some Muslim women choose to wear the hijab, and Islamic headscarf.
"Covering or uncovering does not give the right for anyone to attack or violate the rights of those women."
Ms Abdo said she hoped to speak later today to Sheik Al Hilaly, who has expressed his willingness to hear her concerns about his comments.