The government on Wednesday gave the green light for the Regal Oriental Hotel in Kowloon City to be partially converted into a youth hostel.
Non-governmental organisation Yan Oi Tong will take ownership of 80 rooms, providing 160 beds.
Named "YOT Hub", it is the fifth such project to be granted approval under the Subsidy Scheme for Using Hotels and Guesthouses as Youth Hostels which began last year.
"YOT Hub is well connected by public transport with comprehensive community facilities in the vicinity. This project not only provides young people with a comfortable living environment but also enables them to broaden their horizons and achieve their personal development goals through various self-enhancement activities," a government spokesman said in a statement.
Programmes such as training and internship will be provided for tenants to deepen their understanding of national development opportunities.