The property, situated in regeneration area of Royal William Yard, will undergo an £18m redevelopment, re-opening for both business and leisure travellers in 2015.
Now that the contract with developer Urban Splash has been signed, Will Ashworth, the managing director of Watergate Bay Hotel, says he wants to create something truly unique in the region.
“When we first arrived at Royal William Yard and saw the potential of the Melville building, I immediately knew we could create something really exciting,” said Ashworth.
“We have a distinctive approach to hospitality and ‘active relaxation’ lies at the heart of what we do. Our north Cornwall hotel has its own special sense of style and tone, and our aim is to take this and develop it in a way that is right for Royal William Yard.
“We are keen to create a business that plays a significant part in the plans for the regeneration of Plymouth.”
As well as 60 bedrooms, the plan is to create two restaurants, a cocktail bar, members club, 25-metre swimming pool and an events space for leisure and business use. The hotel’s design will be centered on the distinctive clock tower and courtyard, over-looking the marina.
Nathan Cornish from Urban Splash added: “This is a significant milestone in our redevelopment of Royal William Yard and we are very pleased at entering into an agreement with Watergate Bay.
“It has long been our intention to bring a quality hotel operator to the Yard and this announcement is a big step in making this a reality.
“There is lots of hard work ahead before the scheme gets on site and we look forward to working with Watergate Bay through the planning and development process to further realise our vision of a thriving mixed-use community.”
The next step is to achieve planning permission and the coming months will include extensive liaison with architects Gillespie Yunnie, Plymouth City Council and English Heritage.
The leader of Plymouth City Council, Tudor Evans,said: “Plymouth is a great place to invest and we welcome developments such as this which not only offer something new for the city, but will breathe life into a spectacular historic building.
This fits in with our plans for growth, particularly in the tourism and visitor sector, where developments such as these will help the city broaden its accommodation range to include higher-end, quality hotels.
“This is great news, helping to spread the word about Plymouth Britain’s Ocean City as a fantastic place to be.”
It is hoped that building work will begin in Spring 2014.