The £20m eco-friendly hotel will be built on University Park next to the East Midlands Conference Centre.
It will will be funded entirely by the University with a target audience of conference delegates, university visitors, local businesses and the general public.
The hotel is due to be completed by the end of 2012.
It will feature state-of-the-art technology to reduce carbon emissions plus accessible rooftop terraces, green roofs and maximum use of natural daylight.
Solar photovoltaic panels and ground-sourced heat technology are incorporated, as well as a lower energy assisted-cooling ventilation system.
Chris Jagger, Chief Estates and Facilities Officer for The University of Nottingham said “The hotel will enhance the existing range of conference facilities provided by the University.
“It will provide a source of excellent quality accommodation all year round, not only supporting the existing meeting spaces provided by the award-winning East Midlands Conference Centre, but also for visitors to the University.”