REIGATE and Banstead Borough Council pay for the construction of a new hotel in Redhill which councillors say will help boost the regeneration of the town centre.
The 68-room hotel will form part of the Warwick Quadrant redevelopment by Sainsbury's and Aviva, which will also see expansion of the existing Sainsbury's store, a new state-of-the-art gym and additional car parking.
Councillor Natalie Bramhall, executive member for property and regeneration, said: "The Borough Council is committed to maximising our assets to move forward the regeneration of Redhill town centre.
"Our investment will ensure this important element of the development can go ahead.
"Redhill really needs a hotel like this.
"It's an ambitious plan for the Council to invest in the hotel but the regeneration benefits of this development are significant.
"It will provide much needed accommodation for business people and visitors to the borough and help to boost the town's evening economy.
"We're confident that we will get a good return on our investment through the ongoing rental income and the increase the value of the site in the longer term."
The hotel will be built by Sainsbury's as part of their development and when complete the Council will lease it to Travelodge Hotels Ltd.
Sainsbury's and Aviva's plans involve demolishing 135,000 square feet of office space to allow the much-needed expansion of Sainsbury's existing store.
The hotel and gym would be located above, with two floors of additional parking for 560 cars to supplement the existing 340-space basement car park.
The scheme will also develop the entrance to the Harlequin Theatre and library, as well as the public space outside them.
