The site between Princes Street, Leith Walk and York Place will be transformed to make way for up to one million square feet of prime retail space, plus a 210-room hotel, car park, 30 restaurants, luxury apartments and a multi-screen cinema.

The five-star hotel, the design of which has been compared to a walnut whip, is at the centre of the scheme.

Some 143 homes, mostly one and two-bed flats, will also be included in the project which is due to be completed by 2020.

According to a report to go before councillors next week, preparations for the project are going well.

It said the majority of compulsory purchase orders (CPOs) have been agreed and negotiations are progressing well for outstanding land acquisitions.

The development, which will retain the existing John Lewis store, will also include a multi-screen cinema which is expected to offer more art house films than the Vue multiplex at the nearby Omni centre.

It is understood developers are hoping to attract at least one Michelin-starred restaurant to the new complex.

A footbridge which crosses Leith Street is being removed as part of the project but the council, which owns the bridge, plans to store it and try to “recycle” it in a new location.

Council leader Andrew Burns said the scheme would be an exciting addition to the city centre.

“It’s going to make a massive difference. It’s not just the shops, there are up to 30 restaurants,” he said.

“It will transform Edinburgh’s shopping offer.”

The St James Quarter is among a series of developments to have attracted the attention of heritage experts, who have been examining whether or not Edinburgh should retain its world heritage status.