The Courtyard by Marriott will be built at Inyo and M Streets.
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The plans call for 144 rooms, along with meeting space, a swimming pool, fitness center and a lounge and bistro.
Parking will be available in a nearby public garage.
The five-story building is a scaled-down version of a previous proposal for a 200-room hotel, but officials say it's a big step in the right direction.
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"Great cities have great downtowns," says Fresno Mayor Jerry Dyer. "Great cities have vibrant downtowns. Great cities have downtowns with a strong nightlife. Great cities are not just about 8-5, they're about after 5. That's what we're creating in downtown Fresno, and this is a big part of it."
Mayor Dyer says the hotel will create about 50 to 60 new jobs, in addition to construction jobs.
The contract calls for the hotel to be complete by December of 2024, but officials say the goal is to open sooner than that.