Ocean Mist will be restored to its 1920s heyday as a luxury yacht, when it used to transport the world’s fastest racing cars around Europe.
The vessel, which was once owned by the Guinness dynasty, will boast 19 individually design cabin bedrooms under its planned new guise.
The new lease of life for Ocean Mist, which will operate near the existing Malmaison Hotel, will be the latest chapter in a story which has seen her deployed in a search for hidden treasure in South America and snapped up by a Highland whisky tycoon with his own cattle ranch.
The refurbishment and restoration project, which is expected to cost at least £500,000, will also bring to an end a long saga about the fate of the vessel.
It was converted into a bar-restaurant before it was moored in the Water of Leith in 1983, but has been lying empty and has gradually fallen into disrepair since its last incarnation closed more than five years ago.
It is hoped the overhaul of the vessel will be completed by the end of the year to coincide with the centenary of its completion at shipbuilders George Brown & Company in Greenock.
It was originally built as a steam trawler for the Royal Navy for the First World War, but was instead turned into a yacht after the conflict ended before it was ready. It was acquired by racing driver Kenelm Lee Guinness in 1920 and used to transport his cars to the likes of Italy and France.
Its renovation is being masterminded by the same entrepreneur who led the acclaimed transformation of a former lighthouse ship into a floating hotel.
Boasting 23 rooms, a bar-restaurant and a function space, it is has been operated since the revamp was completed at the start of the year by the trust which runs the Royal Yacht Britannia.
Alan Pedley, the Leith-based businessman behind the Ocean Mist hotel venture, was involved in every detail of the design and management of the £5 million Fingal project.
Mr Pedley, who acquired Ocean Mist last August from its long-time owners, said: “The idea is to turn it into a classic old super yacht, where people can stay on board, walk out on the deck and enjoy the views on the Shore.
“Leith has a wonderful array of restaurants and bars. There is no point in me competing with them. People are sick to death of how that thing looks. I want to turn her into a lovely old swan again.
“She has been mistreated over the years. She has been over-loaded with around 100-odd tonnes of waste which has been cleared out, and I’ve been gently lifting her out of the water.
“However she is actually in better condition that I thought she would be.”
Plans lodged with the city council by Mr Pedley state: “Whilst being the focal point of the Shore area she is now sadly in a state of disrepair and an eyesore for the local residents of Leith and all who visit.
“The vessel has recently been purchased with the intention to secure the hull’s integrity and then rebuild her into a beautiful classic yacht to grace the quay for many years to come.”