The group will launch a 282-room hotel at a former Premier Inn site in the Haymarket area of the Scottish capital on 7 October.
The venue is set to undergo a ‘extensive renovations’ to convert it to the three to four-star Leonardo Hotels brand.
It comes 18 months after the group launched its first UK hotel at Heathrow Airport in March 2015.
Daniel Roger, managing director of Leonardo Hotels in Europe, said: “The capital of Scotland is a fascinating and multifaceted city. It is second only to London as the largest economic and trade centre in Great Britain.
“I am certain that we can expect a positive response from our guests at the new destination, as we are offering them another attractive addition to our existing hotels.”
Leonardo Hotels was founded in 2007 and now operates over 65 hotels in more than 35 destinations in Europe.
The group is aiming to continue its expansion, focusing on properties in Germany and other major European cities.