Councillors agreed to support the development which will see part of the Pullar's Dyeworks complex on Mill Street changed into a hotel with a bar and restaurant.
The £5m Premier Inn project could create up to 40 jobs and has secured the future of one of Perth's most high-profile empty buildings.
Councillor John Kellas welcomed the news, saying it was "excellent use of the building particularly as it is in the centre of the city".
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While Committee Convener Tom Gray added: "It’s a welcome development and something which has been badly needed at that site, particularly as it is an affordable hotel."
During the consultation process with the council’s planning department, the developer, Deanway Muir Ltd, ensured the hotel would fit with the neighbouring concert hall and surroundings.
The company said: "The impact on the external appearance of the property will be minimal. The existing timber windows on the Mill Street façade will be retained and refurbished with secondary glazing to the inside, whilst the existing Crittal windows to the upper floors of the 1930s extension will be replaced with aluminium heritage windows to match as closely as possible."
It also said the stone and brick finishes, the front entrance and the existing stair inside the building will also be retained.
The building, which dates to 1865, has been empty since the Department for Work and Pensions closed in 2005.
(JP/CD)
