Hackland + Dore Architects said the 51-bed hotel will rescue and repurpose a Category B listed Georgian terrace building located at 10 Picardy Place, which also lies in the city’s Old and New Town World Heritage Site.

The practice said: “The conversion and extension address a building that suffered from extensive brutal alteration to form a reinforced parking garage for a car hire company.

“The proposal alters the non-original concrete frame to introduce an open inner courtyard which allows natural light to penetrate to all floors down to the lower ground level, a reference towards the former rear garden that once served the main townhouse.

“Rooms wrap around this new source of natural light at the heart of the building; a basement area to the front is reinstated along with a contemporary ground floor entrance and the Georgian façade is to be fully restored.”

In a heritage statement by Cundall on behalf of Edinburgh Picardy Place Ltd, the developers said: “Currently vacant and with the last former use as a garage no longer a viable option, there is an immediate need to secure a new appropriate use for this property if its significance is to be sustained.

“The proposed development will provide an economically sustainable long-term future use for 10 Picardy Place that will not only preserve and enhance the special interest of the B-listed building, but it will also preserve and enhance the character and quality of this part of the Conservation Area and World Heritage Site by securing a number of conservation gains.”

The local community council for New Town and Broughton welcomed the proposals.

In a letter to the council’s planning department, it said: “In summary, whilst having some reservations with the proposal as presented, NTBCC are broadly supportive of this application. We accept that the proposed use is appropriate for this location, and overall the proposal will return a vacant property to active use.”

Edinburgh World Heritage said: “From an overall World Heritage Site perspective, we consider that the proposals are acceptable in principle. Given the significant degree of alteration of the building, there is a considerable opportunity for its conversion to reinstate key elements of the building’s quality classical design and we advise that every opportunity is taken to do so.”

In April, real estate adviser CBRE announced it was marketing 10 Picardy Place, formerly a Hertz car rental office, for sale to transform it into a 51-bedroom apartment hotel.

Chris Dougray, executive director at CBRE, said that it was a “rare chance to secure a consented freehold site in one of the best locations in Edinburgh, one of Europe’s most sought-after tourist destinations”.

He added: “It’s the perfect place to stay for those going on shopping or theatre breaks, close to the restaurants and bars of Broughton Street, Edinburgh Playhouse theatre, and the St James Quarter.

“It’s a fantastic opportunity for a hotelier or hotel group to transform an empty building dating back to the 1800s into a beautiful hotel and revive the historic Georgian frontage, which would not only add to the visual appeal of the area but also create new jobs and attract tourists.”