Admiralty Arch - the iconic gateway between The Mall and Trafalgar Square in the heart of London - is to be transformed into a luxury hotel and restaurant.

Built in 1912 as a memorial to Queen Victoria, the historic Grade I building has been leased by the UK government to Spanish company Prime Investors Capital (PIC) for a period of 99 years.

PIC is a private equity group run by Spanish property developer Rafael Serrano Quevedo. It is believed the group paid around £70m for the property.

Although exact details of the hotel have yet to be confirmed, it is thought that the hotel will have no more than 100 rooms and a panoramic restaurant and bar at the top.

Due to its location - rooms will offer views of both Trafalgar Square and Buckingham Palace - the landmark property is likely to become an instant destination when it opens in 2014.