The new hotel will be operated by Arora Hotels and will become the third London venue under InterContinental Hotel Group's (IHG) flagship brand when it opens in the summer of 2015.
The plan to construct the new property was first revealed by Surinder Arora, founder and chief executive of Arora Hotels, who told an audience gathered at the second British Hospitality Association (BHA) Summit that the hotel would be operated under IHG's Crowne Plaza brand.
However, when Balfour Beatty, the construction firm behind the Greenwich Peninsula development, broke ground in a ceremony on Friday, it was revealed the new venue would be a five-star hotel under the InterContinental brand.
"We’re delighted to be breaking ground today on another InterContinental hotel for London," said Robert Shepherd, chief development officer for IHG in Europe.
"We look forward to InterContinental London The O2 sharing in the future success of its sister hotels, including the recently opened InterContinental London Westminster and InterContinental Marseilles Hotel Dieu.
"The recent sale of the InterContinental London Park Lane and the soon to be open InterContinental Davos Resort and Spa is a testament to the brand’s growth globally and its attractiveness as an icon of luxury,” he added.
The new hotel is being built as part of a development of a 7.6 acre site on Greenwich Peninsula which will also see the construction of a 23-storey tower featuring 100 serviced apartments.
The development is being backed financially by the Queensgate Investment Fund and is part of a wider scheme to regenerate the peninsula - over 10,000 new homes are being built in the area.
The hotel itself is expected to complement the neighbouring O2 Arena. Leisure and conference visitors will be encouraged to check in to the new IHG property.
Containing 4,800sq.m of space for conferences and events, the hotel will also feature Europe's largest pillar-free ballroom, a health spa, several restaurants and a panoramic Sky Bar with views of Canary Wharf and the River Thames.
Surinder Arora said: "The hotel's 3,000sq.m open plan ballroom, the largest in Europe, with pre-function space enjoying panoramic views of the Thames and Canary Wharf, will complement The O2 and soon become established as one of the world’s pre-eminent venues, enabling the UK to compete with other destinations to attract conferences, meetings and events to our shores and to this increasingly strategically important part of London."
The hotel will be built to high sustainable standards using some innovative building techniques - such as off-site construction of individual modules - which will allow building work to be completed in just two years.