The completed hotel will be operated by the Edinburgh International Conference Centre (EICC) under a franchise agreement with Hyatt Hotels Corporation.
The scheme is part of a £350m development of a brownfield site that is being funded by M&G Real Estate and developed by QMile Group.
Councillor Alasdair Rankin, Edinburgh City Council’s finance and resources convener, said: “I’m pleased that councillors have backed the EICC’s plans for a hotel and hotel school today. From examining the business case in forensic detail, as many councillors took the opportunity to do in recent weeks, it is clear that this project can offer significant employment and training opportunities for local people. It will also help ensure the long-term continued success of the EICC, while enhancing the ongoing regeneration of the Haymarket area, all with no expected call on council budgets.”