Hamza Chaoui's lawyer sent Coderre a legal letter Monday accusing the mayor of running a "smear campaign" against his client and demanding an apology and a retraction of the comments.
The mayor told a news conference in late January that Chaoui was a ''threat to public security," and a "instigator of societal tensions."
Coderre's comments came shortly after a published report said Chaoui was going to preach radical Islam to young Montrealers.
Chaoui's past speeches were deemed sexist, homophobic and anti-democratic.
In response, city officials denied Chaoui a licence to operate an Islamic centre in an east-end neighbourhood.
Chaoui's lawyer, Habib Rachidi, says his client's comments were taken out of context by the mayor and that Coderre violated Chaoui's dignity, honour and reputation.
Rachidi said Chaoui avoids leaving home out of fear of physical and verbal abuse.
"You can disagree with (Chaoui)," Rachidi said in an interview Monday. "But you cannot label him like that. He has the right to express himself, it's a fundamental right."
Rachidi said if he doesn't hear back from Coderre by Friday he will "seriously study the possibility of a lawsuit."
Coderre, who was out of the country on Monday, said in a written statement "If (Chaoui) persists and files a lawsuit against me, I will defend myself in court."