Transition metal (Ni, Cu and Fe) substituted Co3O4–ZrO2 catalysts (NiCZ, CuCZ and FeCZ, respectively) were synthesized by PEG assisted sonochemical synthesis and tested for lean methane combustion. These catalysts offered complete combustion of methane by generating CO2 and steam as products. The strong metal-support interaction (SMSI) allowed the high catalytic activity at temperatures below 600 °C. All catalysts have shown superior stability for 20 h of time on stream conditions. In practical conditions, SO2 presence is obvious in methane feed, even trace levels of it inhibits the catalytic activity to a greater extent. In this study, the performance of catalysts and reaction mechanism was evaluated in presence of SO2 in reactant feed using packed bed catalytic activity studies and in situ FTIR. Among all catalysts, FeCZ has shown superior catalytic activity even under SO2 in the feed compared to NiCZ and CuCZ. The apparent activation energy was found to be larger in case of SO2 presence for all the catalysts. The structural and reducibility properties have been characterized with the XRD, XPS, TEM and H2–TPR studies. © 2020, Springer Science+Business Media, LLC, part of Springer Nature.