The proposed $20 million development will now include 140 rooms, split between the silo barrels and a new rectangular building behind the structure on its Lindsay Street side.

The building is expected to be 10-storeys high with conference facilities on its ground floor.

The development requires dispensation approval from the Tasmanian Planning Commission and rezoning approval from the council before a development application is lodged.

Council general manager Robert Dobrzynski said the council applauded the initiative shown by Mr Stewart and other city developers for tourism infrastructure investment that created job opportunities locally.

He said the council wished to have a year-round calendar of events to capitalise upon the city's accommodation, restaurant and tourist businesses.

"These events bring external spend into the city and statistics show that tourists who stay overnight spend significantly more than day trip tourists," Mr Dobrzynski said.

"The Launceston City Council will continue to explore events including conferences and expos which gain the city a greater share of the tourism market and enable us to exploit the many fantastic natural tourist attributes in the city, the region and the state."

Tourism Northern Tasmania chief executive Chris Griffin said additional room capacity in the inner city was always welcome.

He said the expanded silos hotel would give conference organisers another option and the ability to talk about securing conferences of several hundred delegates.

"And this all makes us that much more competitive as a destination," Mr Griffin said.