A report recommends giving a five-year licence for the SkyFlyer - a tethered helium-filled balloon - taking tourists up 400ft (125m) for a 15-minute ride.
Penarth Marina residents say it would dominate the city's waterfront skyline and threaten their privacy.
But Lindstrand Technologies Ltd has said their plans would "provide a world-class ride" for visitors.
The proposed blimp - 100ft (31m) long and 55ft (17m) wide - is aimed at offering up to 16 passengers views across the city and the Bristol Channel from 0800 to 2300.
Sited near the lock and fish ladder on the Cardiff Barrage, it would also be lit at night, providing the most high-profile advertising space in the city.
'Illuminated'
A second element of the planning application would see the former Cardiff Bay Visitor Centre, dubbed The Tube, used as a cafe, ticket office and crew rest area.But the scheme has been opposed by scores of residents who claim the blimp is too large for the location, would be an eyesore and cause traffic congestion.
Around 80 people held a demonstration when planning committee councillors visited the site last week.
One opponent, local resident Hugh Morris, said: "It really is an enormous device - a huge thing.
"It will be illuminated by advertising after dark and will operate until 11 O'clock at night at what is a quiet residential area.
'Unacceptably intrusive'
The SkyFlyer aims to offer up to 16 passengers views across Cardiff Bay and the Bristol Channel"It will be located under 300 metres from the nearest housing," he said BBC Radio Wales on Wednesday.
The opposition has been backed by Cardiff South and Penarth MP Alun Michael and AM Vaughan Gething.
A joint letter to the council, they said the SkyFlyer scheme would be "unacceptably intrusive" on nearby homes while "lights on the adverts will cause an obvious nuisance until late at night".
The politicians' letter called on the council to reject the application and "take the lead in finding the right location".
Continue reading the main storyThe offer is for people of all ages to be able to fly and have a wonderful view and flying experience over beautiful countryside and bayside and riverside”End Quote Alistair Gunning Lindstrand AeroPlatforms But Alistair Gunning, from Lindstrand AeroPlatforms, the company behind the plans, described the balloon as a "real attraction" operating in an area of mixed use and not just housing.
"The offer is for people of all ages to be able to fly and have a wonderful view and flying experience over beautiful countryside and bayside and riverside," he told BBC Radio Wales.
"From the air you can see about 25 to 30 miles on a good day and it is a very pleasant experience."
A report before Cardiff planners recommends the go-ahead as it would tie in with the council's aims to provide "distinctive and high quality activities to encourage year-round visits".
It argues that the nearest residential property would be 320m from the SkyFlyer.
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