A new build six-storey hotel has been approved for Victor Harbor in South Australia.

Located next to the Anchorage pub, the $40 million hotel will offer 126 rooms and five two-storey penthouses, as well as a conference area.

Owners of The Anchorage for 19 years, Philips Land Co, revealed plans for the development of their Flinders Parade properties at a special presentation to business and council leaders on Monday, July 1.

The proposal was passed by City of Victor Harbor's Independent Council Assessment Panel (CAP) earlier this month.

In a statement on Facebook, City of Victor Harbor Mayor Moira Jenkins said she was "thrilled" the development had been approved.

"This will be fabulous for Victor Harbor and will be a game changer for our economy," she said.

As part of the project, The Anchorage heritage building is to receive a $2.5 million restoration and a new 126 room hotel is proposed on floors one to four, with the existing pine tree retained.

The hotel will include a 400 seat function centre on the fifth floor and five penthouse apartments. 

A 266-space, multi-level car park is proposed by the developer on council land, of which 89 spaces would be dedicated to the hotel.

An elevated footbridge over the SteamRanger precinct will be built to connect the car park to the Hotel.

The project also includes a $5 million investment in a council owned car park at McKinlay Street.

Click here to learn more about the redevelopment.

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