Qatari Diar has been given consent to extend and alter the American Embassy site at 24-31 Grosvenor Square, W1, to develop a luxury hotel.
Under the plans, the seventh floor of the building will be extended, two additional basement storeys will be added, and further alterations implanted to develop the five-star 137-bedroom hotel.
There will also be five restaurants, six shops, a spa and a 1,000-person ballroom.
The scheme is part of a £1bn plan to restore Grosvenor Square.
Gerald Eve is advising Qatari Diar.
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