BENDIGO residents are drowning out the voices of intolerance by vowing to stand up in the face of anti-Islamic protests. 

Hundreds of residents have fought back against anti-Muslim sentiment that has hit the town in recent days, saying "the world needs to know that Bendigo is for multiculturalism and diversity". 

The strong opposition comes as councillors this week approved the region's first mosque, with an anonymous party littering the town - and one councillor's home - with black balloons and sharing views that approving the place of worship would see a breakdown of the Australian Constitution. 

A peace ceremony, which organisers say was arranged in response to the anti-Islamic protests, brought people together on Friday night to replace the "hateful" black balloons with rainbow balloons. 

Their message was clear - "This is Bendigo". 

Organiser Elise Snashall-Woodhams encouraged people who supported inclusiveness to hang their own rainbow balloons around the town to "push the tide of black and negativity and replace it with colourful and positivity". 

Hundreds more colourful balloons will be handed out in Bendigo on Saturday morning, with many faith and community leaders uniting in support of the mosque. 

The balloons will bear tags that say "racism has no place in Bendigo" in a move organised by the Uniting Church. 

Many local  leaders, including Member for Bendigo West Maree Edwards, Rev. Cynthia Page of Eaglehawk Uniting Church, and Rev. Bryn Jones of Kangaroo Flat will hand out the bright balloons on the corner of Hargreaves and Williamson streets.

“We are proud of our history of multiculturalism in Bendigo and want to use this event and the symbolism of the colourful balloons to express our support to our Muslim neighbours.” said Rev. Cynthia Page of Eaglehawk Uniting Church.

In a further show of support, an online Change.org petition has attracted almost 1000 signatures and dozens of messages of support for the mosque and for diversity in Bendigo. 

"Because we're people. We're all just people. And we all deserve to be treated like people," Dave Hogan said.

The petition was set up by Bendigo's Damian Wells, who says the recent anti-Islamic messages in the media did not represent the town he knew and loved. 

He said the petition aimed to "show the world that Bendigo supports multiculturalism". ​

"Setting it up was based on anger, really. Anger that the world was seeing Bendigo as a racist town when we are so welcoming and accepting of everyone," he said.

There are just over 200 Muslims in Bendigo who currently congregate for worship in rooms at La Trobe University.

Mosque applicant Munshi Nawaz says they are relieved the mosque had been approved. 

He said the decision was expected to face a legal challenge from protesters but reiterated the anti-Islamic group did not represent the whole of Bendigo. 

Mr Nawaz, who is a Muslim himself, said the Islamic community had tried to distance themselves from the often faceless protests. 

"The response I have had from the community is so nice and understanding," he said. 

"The people who are opposed to the mosque are a very minor section ... and don't represent the views of most Bendigo people."

He said racism often came down to overall misconceptions, of which "this was an example". 

"We believe many of these anti-Islam protesters aren't even from Bendigo and many local members of the community have expressed dissatisfaction (about the situation)."

Residents can find the petition here

The group responsible for the black balloons has been contacted for comment.