Andrew Wommack, who has said publicly gay people are "not normal", is due to appear at God TV's Summer Celebration, in Plymouth.
The city council said it had "received verbal and written assurances" that its equality standards would be upheld.
Pride in Plymouth said it was a "real backward step".
Director of the organisation, Jo Lewis, said: "The council has made a mistake and haven't given it the thought they should have done."
She added it was unacceptable to allow Mr Wommack to "publicly preach discrimination towards LGBT people", "in a publicly-funded building".
Mr Wommack, from Texas, will be carrying out three evening services in the Guildhall.
Organisers God TV has described the event as "not-to-be-missed empowering teaching".
On his website, Mr Wommack claims "homosexuality is wrong from a moral and social point of view" and "their lifestyle is not only destructive to themselves but also to society".
Plymouth City Council said the organisers "have provided verbal and written assurances that their event will comply fully with our equalities policy, which is one of the booking conditions".
Plymouth Humanists have also started a social media campaign urging God TV to disown some of Mr Wommack's views.
Chairman, Ben Kerr, said Mr Wommack's "attitude to gay people threatens to undermine the good work that is going on in Plymouth to counter homophobic attitudes".
God TV said the event's primary message was "love and compassion" and it accepts "the need to exercise freedom of speech responsibly and lawfully".
Pride in Plymouth said it would not be staging an official protest but expected "the council to take legal action if hate speech was spouted".
A gay rights group has criticised a city council for allowing a "homophobic" preacher to speak at one of its venues.