Hotel du Vin announced plans to unveil its development on Bristo Place in September this year, following yesterday's licensing board hearing.

The £10 million development will include two-storey bistro, wine-sampling room, whisky bar and two private dining rooms – all envisaged as part of the complex, along with 40 hotel rooms.

The development site, originally home to Edinburgh's first asylum, is part of a restricted zone for the issuing of new licences, brought in five years ago inthe wake of complaints about late-night noise in Edinburgh's Old Town.

Hotel du Vin failed to secure a licence for the scheme last summer despite claims the venture would be of the highest quality. However yesterday councillors agreed to grant the company an exemption.

Robert Cook, chief executive of Hotel du Vin, said: "The decision enables us to run a quality business in Edinburgh which has for some time been our number one target."

"We're confident that redevelopment of this site as a boutique hotel will compliment the Old Town and indeed Edinburgh as a whole – we think it is needed badly and represents what the city aspires to offer its visitors."

Mr Cook last week confirmed Hotel du Vin would be opening its third hotel in Scotland in St Andrews after snapping up the Golf Hotel, which includes Ma Bells, Prince William's favourite watering hole when he was a student.

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