The scheme - by RHWL with Richard Griffiths Architects working for the Manhattan Loft Corporation - will transform the 32,300m 2, Grade I-listed, former Midland Grand Hotel, which has stood empty for 70 years.
Working closely with Camden council, English Heritage and the Victorian Society, the development team aims to restore the 'splendour of the original building by bringing the majority of it back to its original use'.
The planning permission allows for a five-star, 245-bed hotel, with two restaurants, two bars, a health-and-leisure centre, a ballroom, 20 meeting and function rooms and 68 new apartments.
The proposals retain the external appearance of the original building, while adding a 'sympathetically designed hotel extension' at the rear.
Manhattan Loft's chief executive Harry Handelsman said he was delighted by Camden's decision. 'St Pancras Chambers is the biggest challenge we have had over the last 13 years,' he said.
'On its completion in 2008, this magnificent building, with all its intricate features, will be the most exciting residential development and hotel in London and the catalyst for the regeneration of King's Cross,' Handelsman added.