The 127-bedroom four-star hotel, which is part of the Talbot Gateway project, is being funded by the local authority.
Councillor Mark Smith, cabinet member for regeneration, enterprise and economic development, said the council had approved a 10-year franchise agreement with the Marco’s New York Italian brand.
“This is a brand which has a reputation for quality and people will recognise Marco Pierre White as a renowned chef,” he said.
“We already have a good selection of Italian restaurants in Blackpool but this will bring a new dynamic in.”
The council has borrowed £17.5m to build the hotel on the site of Wilko’s, which in turn is set to move to new premises earmarked for Tower Street, alongside the Houndshill Centre.
The first phase of the Talbot Gateway already includes Mr Basrai’s World Cuisine.
Councillor Smith added: “There has been more interest in the units and we hope further development in this area will increase footfall and act as a catalyst for more investment.
“We are working very hard behind the scenes to speed the process along and get the next phase of the Talbot Gateway started.
“The Holiday Inn hotel will be a short walk away from the new conference centre which is now being built at the Winter Gardens.
“It is exciting to see the vision take shape, and people will see big changes in the town centre.”