At its Monday night meeting the council approved a special-use permit for construction of the five-story 51,100 square foot hotel, temporarily called the Franklin Hotel.
The planned hotel will have 66 rooms and will be built in the place of the abandoned Carolina Trailways bus station on the corner of West Franklin and Kenan streets.
"One criticism of hotels in general is that they are mainly low-wage jobs," council member Bill Strom said at the Monday night meeting.
The project was proposed by two brothers from Greenville, Robert and Richard Capps.
Capps said the Franklin Hotel will employ about 30 to 35 staffers.
Design of the structure will be overseen by Chapel Hill architect Josh Gurlitz. "The town has given us great consideration, we've gone through many boards and commissions," he said.
Gurlitz added that the project is slated to begin in the spring and will take about a year to complete.
Developer Charlie Johnson of Johnson Company in Catawba, said, "(Gurlitz) is a great architect, he's local, and we like to keep business as local as possible."
Johnson, who has been developing hotels for 38 years, will oversee hotel furnishings, fixtures, equipment and interior design, as well as employee hiring.