This design shows plans for a proposed mosque in Bayonne, New Jersey, now at the center of a federal lawsui

A New Jersey town will pay an Islamic group $3.25 million to settle a lawsuit over its denial of a permit to build a mosque, the Department of Justice announced Tuesday.

Under the settlement, the group will be allowed to build the mosque and the town agreed to limit the zoning restrictions placed on houses of worship.

The Islamic Society of Basking Ridge sued Bernards Township, an upscale town in central New Jersey, last year, claiming it changed its zoning ordinances in order to deny the group’s plans. The Justice Department also sued the town last year, alleging it treated the group differently than other religious groups.

The $3.25 million is to settle the Islamic Society’s lawsuit against the town, split into $1.75 million for attorneys’ fees and costs and $1.5 million for damages.

Through a spokesman, the township committee denied discriminating against the Islamic Society and maintained the denial of the group’s proposal was “based on accepted land use criteria only.” It noted that the group’s members have used other township facilities to practice their religion for years.

“We remain a united township where all are welcome,” spokesman Michael P. Turner wrote in an email. “This is the end of a long engagement on the application and opinions may still be varied, but it is in the best interest of the township to conclude the litigation.”

Central to the town’s concerns was parking. Township planners had concluded that because Friday afternoon was considered peak worship time, congregants would most likely be arriving straight from work and would each need a parking space.

But a federal judge disagreed, and wrote in a ruling Dec. 31 that the town hadn’t conducted similar assessments of worship habits when churches or synagogues had made applications.

The Justice Department lawsuit also alleged the town changed its zoning laws to require houses of worship in residential districts to be at least 6 acres — larger than the lot the Islamic Society had purchased in 2011.

Eight of 11 other houses of worship built before the zoning laws were changed are on lots smaller than 6 acres, the complaint alleged.

A similar lawsuit cost nearby Bridgewater Township almost $8 million in a 2014 settlement.

Last week, a Muslim group sued the city of Bayonne, claiming its proposal to convert an abandoned warehouse into a mosque and community center was unfairly voted down amid a climate of hostility and religious intolerance.