Sheik Taj Eldine Elhilali collapsed with chest pains as the meeting of Muslim leaders started at Sydney's Lakemba Mosque about 1pm today.
Sheik Alhilali is in a stable condition but will remain in hospital for up to three days after collapsing during a meeting today that was to have decided his future.
An ambulance rushed him to nearby Canterbury Hospital where he will remain for further monitoring and observation.
Outside the hospital, Lebanese Muslim Association Tom Zreika released a statement from the sheik which indicates that he will stand down as Australia's leading Muslim cleric.
The sheik had asked for "indefinite leave" from preaching at Lakemba Mosque and would decide shortly what steps to take, Mr Zreika said.
Sheik Elhilali's statement said: "In due course I will take the necessary decision that shall lift the pressures that have been placed on our Australian Muslims and that which will benefit all Australians."
In his letter he again apologised for offence taken by his comments and described women as "the cherished pearls, the dearest thing in the world".
He confessed his analogy comparing immodestly dressed women to uncovered meat was "inappropriate and unacceptable for the Australian society and the western society in general".
The sheik was to have released a statement tonight as to whether or not he would heed calls to step down or hold onto his position as Australia's leading Muslim cleric.
He is under intense pressure to quit following comments made in the sermon delivered last month.
Suffering from asthma, he had became ill late last week when the controversial comments were released to the public