Drinks giant Diageo want to take over the prime site as part of a £150 million investment dedicated to their brand and the world’s best-selling Scotch.

The Scotsman understands the multi-billion pound firm views the location as the perfect cornerstone of a tourist attraction to match its Guinness brewery in Dublin.

An artist's impression of the new Johnnie Walker Experience. Picture: Diageo

Tourists are expected to flock to the centre as a jumping-off point before heading out to a network of 12 upgraded distillery visitor centres.

Bosses at Diageo intend for their plans to put Scotland at the cutting edge of the global boom in food and drink tourism.

Ultimately, they see it rivalling the Guinness brewery in Dublin, which is Ireland’s most popular paid-for tourist attraction with 1.71 million visitors last year.

A Diageo spokesman said: “We have begun negotiations with the owners of the building at 145 Princes Street as a potential location for the global Johnnie Walker brand experience and we will be engaging with the local authority to explore the planning potential for the redevelopment of the building.

“This is one of the city’s landmark buildings and we want to explore its regeneration in a way that respects its unique heritage and place in Edinburgh city centre.

“We cannot comment further while discussions are ongoing.”

An industry source said: “Diageo are keen and no wonder. It’s the perfect location in many ways, right on Princes Street and with plenty of space to create a spectacular attraction.

“It’s fantastic news for Edinburgh.

“This will transform the West End.”

Martin Luney, owner of the Voyage of Buck and board director of the West End Business Improvement District, welcomed the prospect.

“In the West End, we have local, independent Scottish businesses and it’s great to have a huge brand of this scale – and it’s a great use of a beautiful building,” he said.

“Edinburgh has so many different things happening – Hogmanay, Six Nations and the festival – and it’s great to have something specific to the West End.”

Whisky from Diageo’s distilleries all over Scotland contributes to Johnnie Walker, with visitors to be encouraged to travel to famous distilleries, including Talisker and Oban.

Bosses opted for the Scottish capital as their preferred location for the Johnnie Walker centre because of the city’s booming tourism sector.

The House of Fraser store on Princes Street at the junction with Lothian Road closed earlier this month after the collapse of the department chain.

Closed House of Fraser store to become Edinburgh Johnnie Walker centre