Avantis Hotels, which already owns and operates the Hampton by Hilton York in nearby Toft Green, is developing the Hampton by Hilton York Piccadilly.
The site most recently housed offices, a car park and a motorcycle accessory shop.
In addition to the hotel bedrooms it will include eight private residences, all with views of Clifford’s Tower.
The scheme, which is designed to the latest BREEAM standards, will include cycle parking bays and electric-vehicle charging points.
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J H Shouksmith & Sons Ltd