The Café Royal on Regent Street, London, is to be converted into a luxury hotel as part of a £750m facelift of the area.

Alrov Group, an Israeli hotel firm, has acquired a 125-year leasehold on the site from the Crown Estate for £90m to transform the famous site into a 160-bedroom hotel.

The finished hotel will retain the existing Grade I-listed rooms, including the Grill Room, which used to be frequented by Oscar Wilde, Aubrey Beardsley and James McNeill Whistler.

Georgi Akirov, managing director of Alrov’s Luxury Hotel Business, said: “This is an exciting opportunity to develop a world-leading hotel in one of the world's leading tourism destinations and we are delighted to work with The Crown Estate.

“We are committed to developing buildings in a way that enriches the heritage of each site and to delivering beautifully designed, well-managed luxury establishments.”

The wider development project, known as The Quadrant, is a 93,000sq m (1 million sq ft) mixed-use redevelopment of the Café Royal, Regent Palace Hotel and Quadrant Arcade blocks.

David Shaw, head of Regent Street Strategy and Development at the Crown Estate, said: “The Quadrant development’s potential for regenerating the southern end of Regent Street has been reinforced today by Alrov’s commitment to develop the Café Royal in line with our proposals. We are delighted to be working with Alrov on this historic building.”