A proposal for the hotel calls for 200 rooms in a 13,947-square-metre building that would see the four-storey commercial London Court building demolished in its place. London Court is 3600 square metres in area.

The site at 13 London Circuit is close to Canberra City police station, other government buildings, and some small businesses. It adjoins another six-storey building, which contains some government offices and would remain in its current state.

"A five-star hotel will revitalise this part of the CBD and compliment other proposed mixed-use development in the area and the future light rail," Jonathan Tanchevski, the director of developer HTI Group, said.

"We're working to secure an international hotel operator [to run the hotel]."

The One City Hill apartment precinct, dubbed the 'Barracks', would encompass a 2.6-hectare site between London Circuit and Vernon Circle, near the proposed hotel. It is understood the owners are still in the early stages of the development process, and construction is a long way off.

The proposed hotel, which is set to cost nearly $39 million, would include a foyer and reception area on the ground floor, as well as a restaurant or cafe. Accommodation would be spread over 12 floors of the building, with construction expected to start in late 2019.

Meeting rooms and a public bar would be found on level one, while a ballroom and pre-function space on level two would provide extra amenity. Level 15 would hold a day spa, an indoor pool, and a gym.

Two basement car park levels would hold about 30 cars, Mr Tanchevski said, with the intention that many people would travel to the hotel using the yet-to-be-completed light rail, use a valet service, or park in public paid parking lots nearby.

The ACT's design review panel had expressed concerns during the consultation process that guest drop-offs, pick-ups, and valet parking would take place out the front of the building.

London Circuit would be reduced down to one lane each way to accommodate the width and operations of light rail under the proposal, and the hotel's system would contribute significantly to traffic on the circuit.

The panel suggested developers could look at better utilising the rear of the building for pick-ups and drop-offs. The developers had consulted closely with City Services but would investigate the possibility, they said.

The building's encroachment on London Circuit was also not supported by the panel.

"If any proposal for encroachment over public space is to be considered favourably, there must be a clear and
demonstrable public benefit," they said.

The review panel also raised concerns about how the building might fit in with the "rhythm" of the surrounding architectural aesthetic, with many nearby buildings including horizontal, linear designs and "textured masonry".

The developers responded by saying there were a number of more modern buildings to be found at the south of the site.

"These buildings have predominantly glass façades but display linear proportions that are representative of the existing architectural language," the developers said.