Officials said bringing the A-listed Calton Hill site back into “long-term, sustainable use” would be a “significant conservation gain” – praising the sensitive approach by architects.
The move will come as a blow to developers behind a rival scheme to turn the neoclassical structure into a £75 million luxury hotel.
Their bid was thrown out by councillors in December last year, but they have appealed the decision to the Scottish Government.
The latest planning application, submitted by the Royal High School Preservation Trust (RHSPT), hopes to turn the site into a state-of-the-art base for St Mary’s Music School.
The council officials’ backing for the scheme could further complicate the debate around one of Edinburgh’s most iconic buildings.
In a 28-page report, officials said: “On balance, the proposals have no adverse impact on the architectural integrity and composition of the building ensuring that its special character is preserved.”
They added: “The value of returning the main Hamilton Building to a long term future use cannot be underestimated.”