Swinton Park hotel in Ripon, North Yorkshire, has been granted planning permission for a £5.5m extension.
The new facility will include a country club and spa with indoor swimming pool. It will be open to guests, day visitors and club members.
The hotel said the restoration of the workshops and garden buildings adjacent to the grade II-listed, 31-bedroom castle, and the creation of a new wing in its walled garden, would create 25 jobs.
In addition, there will be a 40-seat restaurant, a coffee shop and retail outlet.
Swinton Park proprietor Felicity Cunliffe-Lister said: "We are thrilled to be able to move forward with this project, which will be a valuable asset to local businesses, communities and visitors alike. We hope it will enable Swinton Park to realise its full potential within the tourism industry."