Permission has been granted to turn the former Branigan Weavers on Mayoralty Street into a hostel, to include accommodation, private commercial kitchen, dining and lounge areas and all associated site works.
It is expected that between three to 10 jobs will be created.
The apartments will consist of one bedroom, self catering, double and twin bedrooms with ensuite and dormitories, four bed and six bed, all with ensuite.
The mill is a four storey building, built around 1780, beside the former Custom House, now the Intreo Employment Office.
The site has had a number of uses down the years and was a primary school for Scoil Aonghusa from 1985 to 1993.