Derry City and Strabane District Council's Planning Committee approved the plans by Strand Hotel HIEX Derry/L'Derry at a committee meeting in Strabane.
The new development will be located at 29-35 Strand Road and lands between 61 and 8 Great James Street.
The fourth floor of the hotel will be extended, bringing the total number of rooms to 155. It will also offer bar and restaurant facilities facing onto Strand Road.
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Welcoming the decision, Chair of the Planning Committee, Councillor Warren Robinson said: "This latest hotel development will add to the city's expanding range of hotel accommodation, and located right in the heart of the city centre this will be ideally placed for tourists in terms of convenience.
"I am delighted to see this growing confidence from investors in our city centre, with a number of new hotels and restaurants springing up in recent months. It will revitalise the Strand Road area and create a vibrant and buzzing new hub for local people and visitors to enjoy.
"The provision of modern, quality hotel accommodation is a priority of the new Tourism Strategy for the City and District and will really enhance the offering for visitors. I look forward to seeing the plans as they develop and I am sure the new hotel will bring more people back into that area of the city centre assisting in its regeneration."
(CM/JG)
