The 235-bedroom development will see a number of listed buildings bought back into use, and the space between Victoria Street and the Cowgate developed.

Drawn up by ICA Architects on behalf of Jansons Property, the hotel would be at the heart of a £65m regeneration push for the A-listed India Buildings on Victoria Street and surrounded by a new entertainment destination of bars, restaurants, cafes and public space.

As part of the plan, The Cowgatehead Church is to be renovated and brought back into use as the function facilities for the new hotel.

The external appearance of the buildings on Victoria Street is to change very little and many of the period features within the listed buildings are to be retained.

The India Buildings site is one of the “Edinburgh 12” - important gap sites earmarked by the council as key areas for development. It is understood city chiefs pushed for the plot to become a high quality hotel.

Hundreds of jobs will be created and experts have estimated that it could be worth more than £5m a year to the city’s economy.

But in February, the hotel scheme was also named by UNESCO advisers as one of seven developments it had “strong concerns” about.

Jansons Property managing director, Andy Jansons, said: “These proposals are all about preserving three listed buildings, and bringing a four or five-star hotel development to the city. There is no doubt that an additional £5.3m of annual visitor spend into the Victoria Street and Cowgate area would make a huge difference to some of Scotland’s most iconic shopping areas, and another high-end hotel operator will help to further secure the city’s place as a world-class tourism destination.”

He added: “Any development of the area to the rear of the library - including if the proposals were an extension - would have to address the same lighting issues.”

It is hoped that work will begin on site by January with a view to completion in summer 2018.