Chester's Queen Hotel is to become the largest in the city after its owner bought the Thistle House office block next door to provide for expansion.
The deal means that Liverpool's Feathers Hotel and Catering Group, which owns the hotel opposite Chester railway station, can give the Queen an 86-bedroom extension.
The extension will feature conference facilities and an executive lounge and will be known as The Kings at the Queens.
On completion of the building work, the hotel will offer a total of 215 bedrooms and banqueting centre with a capacity for 300 guests.
The Feathers group own eight hotels in the North West, including the Alicia and the Feathers in Liverpool.
Royal Bank of Scotland Corporate provided the funding for the acquisition and redevelopment.