Lyme Regis Mayor, Cllr Owen Lovell, said: "Subject to the approval of the full council, Lyme Regis Town Council as a democratic body has decided that prayers will be re-introduced at the start of council meetings.
"A councillor who is a non-Christian has agreed he is happy for that to take place, as has previously been the tradition in Lyme Regis."
In March, royal assent was given to new legislation which gives councils powers to obtain the freedom to have prayers as part of formal meetings.
Former Communities and Local Government Secretary and Minister for Faith, Eric Pickles:
"The right to worship is a fundamental and hard-fought British liberty, and the fight for religious freedom in British history is deeply entwined with the political freedoms we take for granted.
"Building on what we have already delivered through the Localism Act, this further Act strikes a further victory for localism, for freedom to worship over intolerant and aggressive secularism, for long-standing British liberties over modern-day political correctness, and for parliamentary sovereignty over judicial activism."
The legislation was introduced after legal action brought by the Secular Society to the High Court which ruled that Bideford Town Council had acted unlawfully by allowing prayers to be said during meetings.
Mr Justice Ouseley said that, under the Local Government Act 1972, the council had no powers to hold prayers as part of a formal meeting.
The Localism Act 2011 established a "general power of competence" enabling councils legally to do anything an individual could do unless specifically prohibited by law.
In a letter to Lyme Regis councillors, Stephen Evans, campaigns manager for the National Secular Society, said: "I'm sure you'll agree that it is important to make local democracy as open and inclusive as possible. The presence of predominantly Christian prayers may be seen as alienating for some who are not Christian.
"Lyme Regis Town Council is of course a secular body and we therefore invite you to question whether it would be appropriate for the council to identify with a particular religious position. We hope you will agree that serving all local residents equally means being scrupulously impartial with respect to matters of religion or belief.
"Despite having a new legal power to include prayers, we ask you to ensure that your meetings are conducted in a manner equally welcoming to all attendees, regardless of their individual religious beliefs or lack of belief. Expecting non-Christian councillors to leave the room or stay silent once the meeting has begun doesn't achieve this."
