The go-ahead for the £150m Exchange 2 development was delayed after concerns were voiced over the height of the buildings.

But now changes have been made to the top storeys of two of the three proposed blocks and councillors have given the project their backing.

The plans include a new four star business hotel, new offices, a business centre, a catering academy and hotel training school intended to provide jobs and training for 200 young people.

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Work could start later this year with a completion due in 2020.

The project is being funded by Catalyst Capital and carried out by a consortium including Duddingston House Properties, the developer behind the controversial plans to turn the old Royal High School into a luxury hotel.

The developers say Exchange 2 is in line with a vision set out by EICC chief executive Marshall Dallas for a hotel complex and industry training school alongside the conference centre.

There will be three separate new buildings - a 400-room four-star hotel close to Dewar Place; the building next door could be either another four-star hotel or offices; and the third building at the east end of the site will be offices.

Part of the development will take place on top of an existing electricity substation and the B-listed facade of a three-storey Scottish Power office building in Dewar Place will be retained.

The developers made alterations to the top storeys of the first two buildings after councillors raised concerns about the visual impact of the blocks.

Other issues about widening pavements and improving access are expected to be dealt with the at the next stage of planning permission.

The proposals are expected to create around 440 direct and 360 indirect jobs on site. The developers say the jobs will pay at least the living wage, there will be no zero-hours contracts.

Julian Newiss, chairman of Catalyst Capital, said the development would enhance Edinburgh as one of the most successful and dynamic cities in Europe.

He said: “We’re obviously delighted that the proposals have been approved and are keen to press on with the development as quickly as possible.

“We firmly believe that this is a ‘game changer’ for the tourism industry in the city, and we look forward to creating a high-quality development that will be unique in Britain.

“Our aim is no less than to create a development that delivers jobs and prioritises recruitment and training of local residents. And we’re determined see those people being recruited into tourism careers, not just jobs.

“Tourism is the world’s biggest business and Edinburgh can continue to go from strength to strength with smart, high quality strategic investments like Exchange 2.”