Planning permission has been granted to convert the derelict Drumsill House Hotel site into a distribution warehouse and offices.
The project, which was approved at the full meeting of Armagh, Banbridge and Craigavon Council last week, is expected to create at least 50 new jobs.
The new building will be occupied by Armagh-based Bunzl McLaughlin, a multinational distribution and outsourcing company, and will be its headquarters.
Its business is currently based at Cathedral Road in the city but the applicant, Silverwood Property Development, argued that the site was too restricted and there was no opportunity to enlarge it.
This was the fourth application lodged to redevelop the site into a distribution warehouse, with previous applications approved in 2005, 2011 and 2015.
In the previous applications, the applicant demonstrated that, in order to expand the business, the current site at Cathedral Road was too restricted and there was no opportunity to enlarge it.
It was pointed out that most traffic to and from the existing site has to negotiate a difficult junction at English Street as well as narrow, busy town centre streets.
It was also demonstrated that a suitable site was not available within the development limit.
The site comprises the former hotel, Met Nightclub (Arena) and car parking.
The proposal is to erect a large, portal frame building, with 1,435 sq m of office space and 6,503 sq m of storage space.
The new administration block will provide staff facilities such as a canteen and toilets, meeting/board rooms and general office accommodation.
The planners said considerable weight had been given to the economic considerations of the case, the unavailability of alternative sites in the locality and the benefits of taking the associated traffic off the town centre streets.