A 198-ROOM motel will take out one block in the heart of town after Gladstone Regional Council approved plans for the project at its general meeting on Tuesday.
The motel, to be located opposite the old post office, will include two towers, a restaurant with street frontage on Goondoon and Yarroon Sts, a coach bay and a public forecourt.
It will cater for what its developer Martin Gleeson claims is a booming population in a town that can only keep growing, despite the winding down of the construction phase on Curtis Island's LNG plants.
"Gladstone's projected population over the next 15 years is going to double," he said. "Plus, there's more industry to come."
Mr Gleeson argues that a major LNG maintenance industry will replace current accommodation demand created by the construction phase.
The developer is now working on building approvals and said the first step would be to demolish the two buildings currently on site.
The new motel will be the largest in Gladstone when it opens in January 2016.
Its closest rival, the Oaks Hotel, boasts 144 rooms.
But local accommodation providers, who face added competition in a CBD already well-serviced with apartments and hotels, are unlikely to share Mr Gleeson's enthusiasm for the project.
Greg Whitehead, from Central Apartment Group, said there were enough rooms on the market.
"We're all for Gladstone going ahead," he said. "We want to focus on filling those existing spaces."
There also were concerns the hotel will impact on CBD parking because it will have 143 car spaces, not 232 as mandated by council policy.
Councillors Graham McDonald and Karen Porter voted against the planning application.
"It's wonderful to see new developments and I'm very happy to see the city growing, but it needs to be on our terms," Cr Porter said.
Deputy Mayor Matt Burnett said the council's car parking policy was "archaic" and people needed to adjust so Gladstone could grow as a city.
Cr Ren Lanzon said it was unreasonable for people to expect door-to-door parking.