Deaconess Hospital is set to be turned into student flats after councillors gave the project the go-ahead.
Sold by NHS Lothian for £4 million, the health facility in the Pleasance dates back to 1894, when it was opened to train local nurses.
The whole site will cater for 330 students and an internal courtyard will also be designed and landscaped by developers Graduate (Deaconess) Ltd.
It was the health board’s headquarters before it moved to Waverley Gate several years ago.
John Bury, head of planning at the city council, said: “The proposal will enhance the accommodation available to students and the built form will complement the local environment and conservation area.”