London US embassy
The US Embassy in London will be converted into luxury hotel Getty Images

The US Embassy on Grosvenor Square will be converted into luxury hotel after planning permission was granted to convert the iconic London building.

Westminster City Council approved plans to redevelop the Mayfair embassy into a 137-room hotel, with additional restaurants and shops at a meeting held last night (15 November).

The plans are backed by Qatari Diar, the real estate arm of Qatar's sovereign wealth fund. The project will carried out by British architect Sir David Chipperfield.

The architect said: "All security measures and defensive characteristics will be removed, allowing the building to reconnect with the public realm of Grosvenor Square."

But added the architect added the "landmark gilded eagle" at the front of the building would stay.

Sheikh Jassim Al Thani, chief executive and chairman of Qatari Diar UK said: "A hotel of this calibre perfectly aligns with the vision and ambitions for the neighbourhood and will help to ensure Mayfair retains its pre-eminent reputation as an outstanding place to live, visit and work."

The US State Department agreed to sell the existing embassy building in 2009 to fund a relocation to the Nine Elms district, south of the Thames. The opening of the new embassy is scheduled to be completed next spring.

The Qatari group's other projects include a luxury home development on the former Chelsea Barracks site and a majority stake in the Canary Wharf office and shopping complex.