Frame it, insulation, Type X drywall both sides, add a new fire rated door from the laundry room to the garage in addition to the plumbing and electric and you "should' be good to go. All this after drawings and permits of course. Not overly complicated, just money.

How would you connect the laundry room and mudroom ?

You could stack the washer and dryer in the laundry room.

We don't know what your plans are for staying in the home, but many buyers will not consider a home with a laundry in the garage.

Thank you Beverly
Yes I thought it might be a problem for resale if I put W/D in garage
That’s why I’m trying to figure out a way to create an actual laundry room with unused space in garage and connect to mud room

You say you have a large 2 car garage, will capturing space to relocate the laundry room reduce it to one car?

Post photos of the existing mud room, it may be more efficient to combine those two interior rooms. If you don't currently have a dedicated mud room, it may be worthwhile to use cabinetry/benches and hooks in the garage rather than relocate the laundry.

Can you stack your current washer/dryer? If not, another possibility is to get a top load washer so the doors don't duel and a large capacity top load can handle your larger items like the bedding. Of course, you'll want to be sure any upper cabinets allow for the lid to be opened.

I imagine the current garage door gets removed and that wall gets opened up. A room built in garage with door added to enter the joined spaces as laundry/mud room. I think you can do a layout that will keep washer and dryer where they are.

This is the only interior space
Laundry and mud room together
The room is very small

Here are more photos of the space

This is not something you can solve with showing some pictures. As @millworkman outlines, there are a lot of variables and code requirements to building a space that has a dryer in it, especially a gas dryer even if you don't move the existing one. Are you thinking of removing the existing wall? We can't tell if it's load bearing and what might be involved in that.

You need to contact a contractor who does small additions and get some advice from someone who can review your space.

I concur with Beverly, stack the ones you already have. Much less expensive.

Could you get the washer and dryer moved over to where the sink and cabinets are? Doesn’t look like the door would hit there.

How about changing the door swing to into the garage?

Where do you live -- do you park in the garage? I'm in a very expensive part of Northern CA where space is at an absolute premium; probably 80% of us do not park in the garage because our houses are dinky and we need all the covered areas we can get. ;) If that's the case for you, too, then I think converting part of your garage into a conditioned laundry room would be fine.

What people are getting at with their suggestions is that you can't just annex garage space as living space -- there are rules about having a firewall between the two. So you'd have to rework all the surrounding walls and doors to reconsitute the separation. I doubt it's worth it.

Either (1) enjoy the cute laundry room and live with the squeeze, or (2) simplify your laundry room so that the entrance isn't crowded -- say, by stacking the machines and moving the sink and counter over, or just rearranging the components you actually need, or (3) keep the laundry in the house and move some other stuff -- the utilty sink or mudroom functions -- out into the garage where they can just be left open to the world.

There might be other solutions, but those would probably involve an architect and/or major contractor to figure out. Good luck!

I agree… keep the laundry where it is and then use some of the garage space for mudroom type storage. You could add a bank of cupboards/closets along a wall in the garage and could make it as expansive as you like. I can’t imagine doing laundry in the garage - that seems really unfavourable. Leaving coats and shoes in a cupboard on your way inside makes sense.

Could the door from the garage that goes to the house be moved to the wall currently holding what looks like a kitchen cabinet? What is on the other side of that wall?

Do a detailed drawing of the offending room interior to the exact inch of everything. Walls entry from, exit to kitchen window doors all exactly and the inch.

Upload it below as legible jpeg, please?

Your "plan" is not a really good idea - and you are talking to someone who has accessed garage space for kitchen or mud room entry a few times.

Do the other drawing , first : )

Following.

We need a to scale floor plan of the whole area . you do it on graph paper every measurement clearly marked and wharere the W/D hookups are now. If you want help that is how you get . Post here in jpeg format in a comment Just like you did with the extra pics.

Agree with @acm - seems like a lot of cabinetry for such a small room - do you need all of it in there? I would relocate cabs and the sink and just simplify/open up the space

A to scale floor plan would be very helpful. Can you post that?

There are lots of skinny laundry rooms out there - some washers and dryers just have a closet.

Lots of people also place their washer and dryer on one side of the garage. They don't make it into a separate room, just a laundry area. Garage Laundry areas are not bad if you live in a warmer climate, but even up north I have seen them. My brother and SIL moved theirs from the basement to the garage after a hurricane flooded their basement. SIL is so happy not to be going up and down stairs for the laundry.

What seems awkward with yours is the door placement.

It may be possible to turn the washer dryer and place them against the window wall.

What about stacking the washer /dryer in the corner and moving the sink over next to the stack but have the sink in a shallower cabinet (like a bathroom-depth cabinet. That might alleviate your pinch-point problem.