Contractors Laing O’Rourke, Multiplex and Sir Robert McAlpine are in the bidding for the main conversion project to create 137 guest rooms, five restaurants and five shops.

The luxury Rosewood hotel project will also a spa and a ballroom with space for 1,000 guests in the building’s three basement levels.

The winning firm is expected to be announced early next year.

Once construction is completed in 2023 the new hotel will have an estimated development value of £1bn.

Architect Sir David Chipperfield’s plan includes retaining the Grade II listed building’s external façade while much of the rest of the building will be demolished down to the basement slab.

The client project team includes Buro Four as project manager, Gardiner & Theobald acting as QS and Hilson Moran delivering building services consultancy.

Abdullah Al Attiyah, CEO at Qatari Diar, said: “Today, as we break ground at 30 Grosvenor Square, marks a momentous occasion for Qatari Diar.

“The opportunity to transform such an iconic address is something that only happens once in a lifetime and we are extremely proud to be responsible for it.”

Qatari Diar will work alongside the Grosvenor Estate to improve the public realm surrounding the new Rosewood hotel.

In doing so the development will enhance the historical expansive green space of Grosvenor Square.