The plans will see the site, which is currently a temporary surface car park, redeveloped as part of Hammerson’s City Quarters concept.
It aims to create lively mixed-use neighbourhoods around flagship leisure and retail centres.
This latest move follows approval last week for Hammerson’s planned landmark mixed-use Martineau Galleries in Birmingham.
The iconic hotel proposal was designed by ACME, the same architect that planned and delivered Victoria Gate.
It will also feature on-site gym and conferencing facilities; a new contemporary bar and restaurant on the ground floor will welcome both guests and visitors to the city.
Nearly 1,000 construction jobs could also be supported during the construction period.
Robin Dobson, UK Director of Development and Project Management at Hammerson said: “Delivering on our City Quarters concept is a key priority for Hammerson and this is our third planning consent in the last twelve months.
“Not only does this mark an important step in our wider plans to create a thriving new cultural quarter in Leeds City Centre, it also demonstrates progress in our wider strategy to support our existing assets by moving beyond pure retail.”