Australia's largest Islamic school is facing closure after inspectors from the New South Wales Board of Studies recommended its registration not be renewed, according to the ABC.

The ABC reported that the NSW Education Minister Adrian Piccoli said he was "gravely concerned" in a letter to Malek Fahd Islamic School in the Sydney suburb of Greenacre.

In the letter, he told the school that the Board of Studies had recommended  the school's registration should not be renewed in 2014.

The Minister raised concerns in the letter over the facilities, education standards and attendance at Malek Fahd. The NSW Board of Studies has only deregistered one school in the past five years.

The school's principal Ray Barrett, however, said: "We have made the necessary improvements that were required by the Board of Studies on behalf of the Minister."

"The school has done all that it could possibly do to meet those requirements."

Dr Barrett said the school's problems mainly related to poor record keeping.

"The compliance around record keeping... has been found wanting,'' he told the ABC.