Councillors are being recommended to approve proposals for the upgrade of the Ruskin Hotel on Albert Road.
Businessman Tony Banks, of Blackpool Promotions, submitted a planning application after buying the 71-bedroom property in June.
He already owns The Royal Carlton, The Royal Seabank, The Boston and Southbank.
The scheme includes building a first floor bridge to link the back of the hotel with an accommodation block and garage which will be refurbished to create the spa.
A report to Blackpool Planning Committee says: “The proposal represents a significant investment on the part of the applicants in a main holiday accommodation area.
“It will bring an existing run down building back into full use which will see its complete renovation and refurbishment.”
The report adds the proposal “will ultimately improve the visual appearance of the block thus having a positive impact in the locality and creating confidence in the business sector.”
Councillors will consider the application when they meet on Tuesday August 1.