A new 47-bedroom Hotel du Vin is set to be built in Edinburgh’s Old Town.

The boutique hotel – located on the site of a former poor house – will feature a covered courtyard, wine bar and restaurant.

Planning permission has now been granted and work on site is due to begin in May, with completion expected in 2008.

Hotel du Vin paid £2.5m for the site to Esk Properties. Managing director Grant Aitken said: "Having considered various development solutions for this site we are pleased to have attracted such a high-quality hotel operator. The consented scheme is both an imaginative architectural solution on a complex site and an exciting addition to the capital’s range of hotels."

In addition, the phase two refurbishment of Hotel du Vin at One Devonshire Gardens in Glasgow is now complete. The 49-bedroom hotel features a bistro, bar and whisky room.

Photograph: a new suite at One Devonshire