Sir Richard Branson has announced Scotland will be the location for the first Virgin Hotel outside the United States. 

Developments will see the India buildings at the top of Edinburgh's Victoria Street converted into a 225-room high-end hotel. 

The hotel is expected to open in 2020 and will have multiple dining and drinking outlets, as well as, hosting a wide range of events, including gigs by musicians. 

The announcement by the global tycoon is forecast to boost the local economy by £5 million with the creation of 200 full-time jobs at the branch. 

Sir Richard said: "Edinburgh is such an iconic city and we're thrilled to be able to say it will be the home of the first Virgin Hotel in the UK and across Europe. 

"My grandparents were from Edinburgh, so Scotland has always held a special place in my heart. 

"The people of Edinburgh have been so great in welcoming us to their great city; we can't wait to open our doors to people across the country and, indeed, the world." 

Virgin opened its first hotel in Chicago in 2015, based in a historic downtown office building. 

With Brexit at the horizon for most Brits, the Virgin Group founder was not deterred from the uncertainty. 

He added: "In times of uncertainty sometimes it's a good thing to invest. 

"Brexit will definitely have a negative effect on the UK economy but the best way to offset that is for business people to continue to invest and not freeze like a rabbit in the lights of a car." 

Plans to build a hotel at A-listed India Buildings, descending right down to the Cowgate, were first unveiled in 2014 when developers Jansons bought the property. 

It was claimed by objectors that a new-build element of the project on a gap site in the Cowgate would block light from the neighbouring Central Library. 

Simon Byrom, community councillor, spent a week living in a tree on the site in protest at the plans. 

Virgin says it wants to involve the community in the project and embrace local music and entertainment. 

Raul Leal, Virgin Hotels chief executive, spoke highly of Edinburgh. 

He said: "It's a top travel destination, it's an amazing place. I spent my tenth anniversary there. It's an ideal location. 

"It's very fitting that our first hotel in Europe is a historic landmark building like Chicago. 

"The location is fabulous and we love the fact we had to work around the building."

He said when they first looked at the building, they walked through it asking: "Can we fit our proposition in here without disrupting the building?" 

He added: "It has charming little spaces, especially the beverage areas. 

"There will be plenty of surprises and delights - little coves and places for privacy, where people can have meetings or dine. 

"From a physical perspective, there won't be too many changes inside the building except for restoring what is there and then overlaying a modern, but warm and sophisticated design." 

Rooms in the hotel - described as "chambers"- are divided into a dressing room and a sleeping lounge, separated by sliding doors, in a bid to allow guests maximum privacy.