Developers say the proposals, which include flats, student accommodation, an arts facility, public square and café, will ‘breathe new life’ in to the neglected area.
The plans were initially announced back in April and have since undergone an 'extensive' community consultation.
It follows a wave of controversy over hotel developments in Edinburgh, with conservation groups fearing that dramatic new buildings could threaten the city's World Heritage status.
The proposed King’s Stables Road site dates from the late 15th Century and has lain vacant since 2009.
But Charles Vyvyan, from Campus Development Management – which is behind the plans - said the hotel’s design was in keeping with the city’s heritage.
“We were highly sensitive to the fact that the site is within the UNESCO World Heritage site boundary, and as we worked our way through the planning process engaged closely with the local community, updating them on our proposals and listening to their feedback,” he said.
“This corner of the Grassmarket has lain neglected for a number of years, and these exciting proposals will breathe much-needed life into this part of the Old Town, providing a hotel, student accommodation, flats and facilities to accommodate and promote the arts.
The development is being taken forward in a joint venture between Campus Development Management and Peveril Securities – the development arm of the Bowmer and Kirkland Group.