Construction on the new 600 room Sofitel Sydney Darling Harbour will begin at the end of this year.
The Sofitel Sydney Darling Harbour is part of the $2.5 billion Darling Harbour's facelift.
Accor Pacific Chief Operating Officer, Simon McGrath said the new hotel was part of Accor's growing collection of luxury accommodation.
"Foreign capital, higher disposable incomes and independent Chinese travellers are fuelling the growth, and in recent months, Australia has seen strong demand from offshore investors for 5-star hotel assets," he said.
"Once open, Sofitel Sydney Darling Harbour will be a major tourism draw card for not only Australians but travellers from all over the world."
Renowned Australian hotel owner Dr. Jerry Schwartz said that the upgrades to the precinct, including the bordering districts of Pyrmont, Ultimo and Haymarket will benefit business, convention and leisure travellers.
In the year ending June 2013, there were more than 1.7 million visitors to Darling Harbour, an increase of four per cent over the same time period the previous year.
Business travel was stated as the trip's purpose for 13 per cent of these visitors. The top home country of international visitors was China (14 per cent).
The United Kingdom and the United States came in a close second and third making up 12 per cent and 10 per cent of the total number of international visitors. However, there was strong growth in the Singapore and Malaysia markets.