Perth's heritage-listed Melbourne Hotel is set for a $40 million facelift to transform the site on the corner of Milligan and Hay streets into a 67-room hotel and 20-storey office tower.
The facade of the building, built in 1897, will remain but two modern additions built in the 1990s will be demolished to make way for an extension that will include a three-level glass-roofed conservatory space.
Most original features will be unchanged except for internal refurbishments such as wall installations and floor finishes, new windows and conservation work on the upper-level street facades.
Perth's Development Assessment Panel last night approved the development, subject to conditions including tweaking the design to comply with height and setback requirements.
City of Perth Deputy Lord Mayor Rob Butler, who is on the panel, said changes made through the approval process had resulted in a good outcome. "Certainly, I think it's going to be great for Perth to see another heritage building being retained and another hotel coming into the fray," he said.
Documents lodged with the council put a $40 million price tag on the development.
The DAP approval represents the latest step in a long-running attempt to refurbish the site.
In 2008, the council approved an application for refurbishment works for a 39-room hotel and 17- storey office building but the approval lapsed before work was done.
A later application in 2011 was also approved but most of the work did not happen, except for the demolition of surrounding commercial buildings.
The hotel is listed on the State and city heritage registers.
Buchan Group director Lou Cotter said the design of the Melbourne redevelopment and the decision to reverse some alterations was intended to offer "a more meaningful understanding of the 'gold boom hotel'".
"Its original significance will be a legacy for future generations," he said.
Buchan made the application on behalf of the site's owners.