An easyHotel is to open in Westminster Bridge Road in Waterloo early next year.
Lambeth's planning applications committee gave the go-ahead after a thirty minute deliberation on Tuesday evening.
Planning officers had vetoed an earlier application because of the lack of an active ground floor frontage. The new proposals include a coffee shop with internet facilities.
The hotel plan attracted 12 objections including one from Richard Harding who addressed the committee. He expressed concern as a resident of nearby Century House who might be overlooked and disturbed by noise at weekends. He stressed that as an office it had only operated on weekdays in the daytime.
In granting permission the committee added a restriction on the coffee shop opening hours preventing the public from being served after 7pm. A ban on weekend evening deliveries was also agreed.
Hotel director Joe Stenson said: "We would hope to employ local people in the operation of the hotel and also provide a lot of local business as we won't have a full restaurant facility".
The building was described as "a little gem" by Cllr Brian Palmer who said it was very much in the post-Festival of Britain style. He thought a hotel was a reasonable use which might also bring more visitors to Lower Marsh Market.
The applicant has agreed to a contribution of £50,000 to fund pedestrian improvements on Lower Marsh, Westminster Bridge Road and Frazier Street. There will also be a further £51,000 contribution to local parks. The total amount secured under a Section 106 agreement is £145,000.
The easyHotel brand, part of the business empire of easyJet founder Sir Stelios Haji-Ioannou, is already used by four London hotels as well as accommodation at Heathrow and Luton airports.
Plans to convert the former General Lying-In Hospital into a Premier Inn were rejected by Lambeth planners after criticism from the Mayor of London.