The practice has secured approval for strategic concept design for a scheme at the 19th-century Middle Malls, which sits within the famous Kremlevsky complex on the south-east side of Red Square.
The building, which was used for presidential press conferences, is to be restored and converted into a five-star, 200-bedroom hotel.
Meanwhile, 'non-historic buildings' sitting within the monument's courtyard are to be replaced with a 27,000 sq m residential complex, including a two-deck underground car park.
Squeezing the specified number and size of rooms into the 46,000 sq m structure coupled with difficult level changes throughout the building proved the greatest challenge, said Ernesto Zabarte, RTKL lead project designer.
He said: 'Retaining the historic fabric and architectural elements of the building while also meeting programme requirements demands design sensitivity and flexibility.'
The design will give the majority of hotel guests views onto Red Square and St Basil's Cathedral directly opposite the site.
'The building has significant symbolic and sentimental value and will undoubtedly become a prestigious and sought-after address in Russia,' added Zabarte.
The project, for CJSC United Industrial Corporation, is due to be completed in 2008.