After sitting vacant and derelict for so long, a site on Tamar Street is set to become short-term accommodation.
Work is also in progress for an adjoining site on Boland Street to become a three-storey office building.
Plans for 29 apartments on the adjoining sites have been scrapped, with the developer saying the return would not have been profitable.
Ten short-term apartments will be built on the site between Launceston Showgirls and a motorcycle shop. A small coffee shop will also be constructed at the front of the Tamar Street property.
The land is owned by Paul Beecroft trading as Beecroft Nominees.
"We have a current development approval for a combination of Boland and Tamar street and that was issued nearly a year ago," he said.
"However, it didn't stack up constructor versus return-wise, so we're having another look at it."
The hotel will have shared kitchen and laundry facilities.
The Tamar Street proposal is expected to cost about $400,000.
If the development application for the Tamar site is approved, construction is set to start "pretty much straight away".
"The existing building that is there now is heritage-listed and they've had some input and have now ticked it off and are happy," Mr Beecroft said.
Heritage character is aiming to be maintained in the Tamar Street site where it can, with an extension at the rear of the building set to house six rooms. The extension will be modern.
The office site, on Boland Street between Centrelink and Launceston Showgirls, is expected to cost between four and five million.
"Those plans are nearing completion and the town planner is doing the planning report in conjunction with a traffic report," Mr Beecroft said.
"A lot of the issues that were addressed with the original 29 apartments, can still be used with the new information, such as the environmental report."
Mr Beecroft hopes the Boland Street development application could be lodged by the end of April.