Daniel and Stuart Levy, owners of the Athenaeum in London and Surrey's Runnymede Hotel, have acquired an 18th century mansion in Watford, Hertfordshire, as the site for their next hotel.
The Grove, once home to the Earl of Clarendon, has been owned by British Rail for the past 20 years, which ran it as a management training centre.
The centre became redundant for these purposes in the wake of rail privatisation and was put up for sale with Knight Frank at offers above £2m.
It is understood the Levy brothers are planning a 100-bedroom hotel and golf course on the site. But the council is monitoring plans carefully as the site is in green belt and the house is Grade-II listed.
A spokesman for Three Rivers District Council said it would be June at the earliest before the scheme would go before planners. "When we've got a formal planning application we will go to a full public consultation," he added.
An objection is expected to be raised by a local farmer, who is reported to keep up to 110,000 chickens on 275 acres of the 312-acre estate. It is understood the Levys are hoping to negotiate a settlement to buy him out of the remainder of his tenancy.