Accor has beaten off stiff competition to open a new flagship Ibis hotel in London's Trocadero Centre.
The 600-bedroom hotel, which is subject to planning permission, will be built in conjunction with Golfrate Holdings, the Isle of Man-based commercial investment property company.
Ibis fended off competitors including Premier Travel Inn to manage the new hotel, which will be developed on the upper floors of the building and is due to open in 2009.
André Martinez, Accor's board member for Europe, Middle East and Africa, said the property would become Ibis's European flagship hotel.
"[This deal] reinforces our existing aggressive programme of organic expansion for our four major brands - Sofitel, Novotel, Ibis and Etap," he said.
Michael Noak, Golfrate's business development manager, added: "There's a significant requirement for affordable yet comfortable hotel rooms in central London, so we're certain this project will be successful. We're confident the hotel will be open in time for the Olympics."
Golfrate bought the Trocadero site from the Burford property group for more than £220m in May. Property consultant CB Richard Ellis Hotels advised on the current deal.