Part of the historic Marchant's Arch in Temple Bar is set to be demolished and replaced by a hotel.
The four-storey building will be built at 1-4 Merchant’s Arch. and will see the demolition of the original structure which contains four shops on the famous lane that connects Temple Bar Square to the Ha'penny Bridge.
An Bord Pleanala overruled the recommendation of the appeals inspector to grant permission to construct a hotel and restaurant on the site.
The appeals board inspector recommended refusal of the development saying that replacing a series of retail units with the restaurant "would have a detrimental impact on the scale, urban grain, and vibrancy of the area".
He added: "It is considered that the loss of the existing mix of small-scale commercial units which contribute to the existing vibrancy and character of the Temple Bar area, and particularly Merchant’s Arch Lane, would not be in accordance with the zoning provisions for the area.
"The proposed development would, therefore, be contrary to the proper planning and sustainable development of the area."
However, An Bord Pleanala's appeals board dismissed the inspector's recommendation and granted permission for the boutique hotel and restaurant.
They found that replacing the smaller retail units with a restaurant "would be an acceptable design approach which would not have a negative impact on the scale, urban grain and vibrancy of the area".
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