B Property Group, based in Auckland, has announced its plans to build the lodge on its 1012sq m section in Brownston St.
The 33-room complex will operate under a long-term lease to B Hotel Group and will include a cafe and wine bar.
It is expected to be finished by November.
Until now, the section had been home to two food trucks, which had moved to another property in Brownston St, and a mini putt course.
While the lake side of Brownston St is inside the Wanaka Town Centre Zone, which allows for buildings like the lodge, the southern side is not.
However, two submissions to the Queenstown Lakes District Council’s proposed district plan asked for both sides of the street between Ardmore St and Dungarvon St to be inside the town centre zone.