The Prophet (peace and blessings be upon him) used to cover his head and wear a long robe. Therefore, the Imam, out of adherence to the Prophet’s model, is encouraged to wear similar clothes. It’s, however, a matter of preference for him.
Dr. Muzammil H. Siddiqi, former President of the Islamic Society of North America, states: “Almighty Allah says: “O you who believe, take your adornment at every place of worship (Masjid).” (Al-A`raf: 31). Muslims should come to the Mosque in the most clean and dignified dress. Friday is a special day of worship. The Prophet(peace and blessings be upon him) used to call it our weekly “`Eid”. It is a Sunnah that Muslims take a shower before Friday prayer and wear clean and good clothes when they come to the Masjid on Friday. The Imam should be dressed in an even better way, because his appearance has a significant effect on the people.
It is not haram (unlawful) for the Imam to wear a suit and tie. It is also not compulsory for the Imam to wear the `Abayah or long coat, but it is indeed better for him, more pleasing to the eyes and more affective in communication with Muslims, if he appears like the Prophet (peace and blessings be upon him). The Prophet used to cover his head and wear a long robe when leading the Friday prayers. This is mustahabb (recommended) and it should be observed as much as possible.”