Wolverhampton will become home to the national museum for the Wetherspoon pub chain as part of the plans.
JD Wetherspoon plans to the transform The Moon Under Water pub in Lichfield Street creating 50 jobs.
The national pub operator's plans were given the nod to last year but it has now made a series of changes.
Changes include an additional sixth floor set back from the front of the building to take the total number of hotel rooms to 90 - a rise of 20 from the original application.
The Heritage Centre will also now occupy a larger area than originally planned, making use of the basement as well as the ground floor.
The new-look pub and hotel are expected to open fully later in 2020, with a date yet to be confirmed for the official opening of the Heritage Centre.
The popular pub will remain open during the work.
Wetherspoon spokesman Eddie Gershon said: “The Moon Under Water is an extremely popular pub in the city.
“The planned re-development highlights our commitment to offering our customers the best pub possible.
“The hotel and heritage centre will be great additions too.
“We are proud to be investing in such a wonderful city as Wolverhampton.”
The 40,000 sq ft space above the pub, with its Art Deco frontage, has been empty for more than 30 years after being home to the old Co-op store.
The building sits opposite the Grand Theatre, which will be expanding into the former post office next door to develop a pop-up theatre.
They are among big changes planned for the city centre, which also include pedestrianise part of Lichfield Street.
City council economy boss Councillor Harman Banger, added: “This exciting project will help transform one of our key city centre streets.
“It will breathe new life into this building and forms part of the £1.1 billion investment in the city centre, further demonstrating the growing confidence in our city.
“It will deliver a significant number of jobs and for a national chain like Wetherspoon to choose Wolverhampton for its national Heritage Centre is an honour.”