The proposed hotel at the old Harland & Wolff headquarters been awarded a £4.9 million grant, bbc.com Northern Ireland reports.
The site for the new boutique hotel is in the building of the H & W drawing offices (pictured), where more than 1,000 ships including the Titanic, Olympic and the HMS Belfast were designed.
The grant was awarded by the Heritage Lottery Fund to regenerate the site, which has lay vacant since 1989. The hotel will create up to 100 jobs, with a further 250 jobs during construction.
Paul Mullan, head of HLF Northern Ireland, said: "This is an exciting project that will see one of Belfast's most historic buildings reborn as a major tourist destination.
"This, like many of the city's historic buildings, has incredible potential to act as a driver of regeneration and economic growth."
The four-star, 84-room hotel is expected to cost about £27 million to build and it is one of a number of developments planned for the regeneration of Belfast's Titanic Quarter.