The decision was taken yesterday in a meeting of Capital Development Authority (CDA), which is responsible for development and civil amenities in Islamabad.
The Express Tribune reported that CDA approved the allocation of a half-acre plot of land in Sector H-9 of the capital for a Hindu temple, community centre and cremation ground in the federal capital.
"It was a longstanding demand of the Hindu community which has finally been fulfilled," the paper reported.
As there was no crematorium in the city, they also had to take the bodies either to Rawalpindi or to their hometowns for cremation.
The only large temple in the twin cities of Islamabad and Rawalpindi is Krishna Mandir in Saddar although a few smaller ones exist in residential parts of Rawalpindi cantonment.
The CDA board allocated the plot close to one that had already been allocated to the All Pakistan Buddhist Society.
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