LUXURY brand W Hotels will be part of the major St James redevelopment.
The current shopping centre will be demolished and replaced with up to 250 homes, 30 restaurants, shops and a multi-screen cinema.
Completion of the 1.7 million square foot development is expected by 2020 and the new hotel is due to open the following year.
The 214-room hotel will have a rooftop bar and outdoor terrace with views across the city skyline as well as a spa, restaurant and event space.
It will be the second W hotel in the UK, after the Leicester Square hotel in central London which opened in 2011 and recently hosted a karaoke event with tennis champion Serena Williams.
Michael Wale, of the hotel chain owners Starwood Hotels & Resorts, said: “As an established business hub with a thriving global tourism industry, we are confident that there will be a huge appetite for our innovative lifestyle brand in the Scottish capital.”