FOURTEEN new hotel beds are to be created in the city centre.
The application has approval at Oddfellows, 20 Lower Bridge Street.
Planning officers were told permission was being sought for a contemporary design, four storey hotel at the rear of the grade 2* listed building and for a change of use of 5 Grosvenor Place, itself a grade 2 listed building which adjoins the Oddfellows Hall.
The premises had approval in 2007 to be refurbished, modernised and extended to provide a restaurant, a private member's club and a garden brassiere.
Alterations were also agreed to attic rooms to provide a small number of hotel bedrooms.
No objections were raised by Chester's Conservation Area Advisory Committee but English Heritage opposed the plans.
Residents in Grosvenor Place objected and argued the hotel building would be overdevelopment and would harm the architectural and historic significance of the locality.
They raised fears about noise and traffic.
Planning officers point out the service area on which the hotel is proposed is surrounded on three sides by wall and on the other side by 5 Grosvenor Place.
They agreed the site is "highly sensitive" and said special attention was required to ensure the development preserved the setting of the listed buildings and the character and appearance of the conservation area.
The hotel would be a high quality contemporary design, they felt which reflected architectural styles in the area.
The top floor would be in the roof space.
The building would not be overprominent or out of keeping and they believed it would improve the character and quality of the area.
Although the use of 5 Grosvenor Place as a house would be lost, it would be replaced by specialist hotel accommodation which was supported by the tourism board. would help to promote the economy of the city centre.
They did not feel there would be unacceptable harm to the residential amenity of nearby occupiers and accepted that due to the city centre location of Oddfellows, no parking should be provided.
Recommending approval, they said the new hotel building and the conversion of 5 Grosvenor Place was consistent with the mixed use nature of the city centre location and would provide much-needed hotel accommodation.
The development would improve the character and quality of the area and preserve the character and appearance of the city conservation area.
The borough council agreed the hotel accommodation could have permission.