Meldrum House Country Hotel and Golf Course in Oldmeldrum, Aberdeenshire, is planning a new conference and banqueting suite and an additional 28 guest rooms.
The £4.5million investment will deliver a new wing and increase the number of bedrooms at the four-star hotel to 51.
With completion scheduled for June 2016, the work is expected to create 15 jobs and take the total number of staff employed at the hotel to more than 100.
Chief executive Andy Burgess said: “The new function suite will be a great addition to Meldrum House.
“It will provide us with the ability to offer three conference rooms, more than double our bedroom capacity and provide a banqueting suite with capacity for up to 200 people.
“The development will be marketed to new visitors from all over the world, while creating new jobs and major benefits to the local economy.”.
Meldrum House – currently AA Hotel of the Year for Scotland – is set in 240 acres and privately owned, with the main building dating back almost 800 years.
Its new wing, spanning more than 10,200sq ft, will be the first extension to the hotel since a complete renovation in 2009.