The home of the US embassy in Mayfair is set to be redeveloped into a five-star, Qatari-owned hotel as part of a £1 billion restoration.

American diplomats will move to new premises in Nine Elms next year and the Grade II-listed building will be turned into a 137-bedroom hotel with a ballroom capable of holding up to 1,000 guests.

The plans, which also include six high-end shops and five restaurants, are expected to be submitted to Westminster council in May. They form part of a £1 billion development of Grosvenor Square.

The Qatari owners of the embassy, Qatari Diar, has enlisted British architect Sir David Chipperfield for the design process.