The cost of the new Oxford Centre for Islamic Studies being built off Marston Road, is expected to reach £75m, more than double the original estimate.
Work on the scheme began early in 2002, when the estimated cost was put at about £30m.
The centre was originally meant to open beside the banks of the Cherwell in 2004.
But the structure of the building is still being completed this month, before the internal work on the huge centre can get under way. It is now expected to open its doors to scholars from across the world at the start of the 2006-7 academic year.
The centre is one of the biggest building projects the city has seen this century. It includes a mosque, a 75ft dome and 108ft minaret.
Registrar of the centre Dr David Browning said: "There has been some slippage. The core structure of the building is complete and we can now get on with the interiors.
"But we are determined to get it right. If it takes an extra year, so be it."
OXCIS began its life 20 years ago in a wooden hut next door to St Cross Church and now operates from offices above a bank in George Street.
It was able to plan its new home thanks to a £20m gift from the late King Fahd of Saudi Arabia and land being made available by Magdalen College.
The decision to use traditional building methods and materials from across the Islamic world has also added to the delays, with Islamic nations now offering support to see the project completed.
The centre will feature a Kuwait Library, a 220-seat Malaysia Auditorium and the Istanbul forecourt is now taking shape.
The preliminary designs for the landscape garden are being drawn up by the Prince's Trust, and the gardens will be named after Prince Charles.
To mark OXCIS's 20th anniversary the Lord Lieutenant of Oxfordshire, Hugo Brunner, visited the site.
The imposing mosque dome has been constructed entirely of brick, with no steel or concrete.
The cost of the foundation and structural work is put at £40m, with the interiors and landscaping likely to cost another £30m, while the site cost £6m.
A giant subterranean flood tank has been built under part of the garden to retain water running off the building, following planning fears that it could add to flood risks from the Cherwell.
The Lord Lieutenant said: "It's like building a whole new Oxford college within one building. The way it is being built with traditional materials means it is taking a lot longer to construct than most buildings.
"This really is a major undertaking and will have a significant presence in Oxford. One thing is clear, there has never been a greater need for the west to understand Islam and vica versa."
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