Funding for the 280-bedroom, four-star-plus property is still to be secured and more detailed planning permission needs to be obtained, but if successful it is hoped the hotel will open at the end of 2011 - in time for the London Olympic Games.
Excel London already has five on-site hotels including a Crowne Plaza, Novotel and Premier Inn.
The venue will host seven Olympic and five Paralympics events during the 2012 Games.
Excel's owner, Abu Dhabi-based ADNEC Group, which is funding Phase 2 of the £163m conference centre development, is one mooted contender for investment.
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