The Or Thora synagogue has been bought by Al Badr, which already runs one small mosque on the same street, Saint Dominique in the first arrondissement.
However, the existing mosque is frequently full, with people forced to pray on the pavement, particularly during Friday prayers. Meanwhile Marseille's Jewish population has left the city centre for the suburbs in recent years, and the Or Thora synagogue sometimes has fewer than ten worshippers at services.
The sale is currently being reviewed by the city council and the new mosque is likely to open within months.
"For the past 20 years or so we have seen the shift of the Jewish community to other neighbourhoods," Zvi Ammar, President of the Marseille Israelite Consistory, said, adding that he viewed the sale "positively".
"We all have the same God, the main thing is for this to proceed in harmony," he said.
The site near the city's main rail station was built as Jews flocked to Marseille from Algeria after the north African country gained independence from France in 1962 following an eight-year war, he noted. Marseille's Jewish community is thriving, with Ammar pointing out that the number of synagogues had nearly doubled to 58 from 32 over the last three decades.
The city's 70,000 Jews make up one of France's - and Europe's - largest Jewish communities. Marseille's population of nearly two million also counts around 220,000 Muslims, of whom 70,000 are practising.
Marseille's Muslims are still awaiting the construction of a Grand Mosque, but the project promised by the city's mayor in 2001 is mired in financial woes as well as legal challenges by the far-right National Front. At an estimated cost of some 23 million euros ($26 million), the mosque would be France's largest if the project is finally achieved.
France is currently home to 2,500 mosques with another 300 under construction, however Muslim leaders argue that this number falls short of demand.
Last summer Dalil Boubakeur, Rector of the Grand Mosque in Paris, suggested that some of France’s 40,000 churches could be turned into mosques .
“It’s a delicate issue, but why not?” Boubakeur told Europe1 radio.
The idea which received some support from France’s Christian leaders, although ex-president Nicolas Sarkozy urged against it.
However, the decision to transform a synagogue in Marseille into a mosque may not go down well as tensions between the Jewish and Muslim communities in Marseille have been high over recent months.
In January, the president of the Marseille Israelite Consistory, Zvi Ammar, said that Jews in the city should refrain from wearing the kippah, although France’s chief rabbi called on followers to ignore the call.
Last December, a Jewish teacher was stabbed in Marseille by assailants who shouted support for terror group Isis.