The development, which will also include up to 1,500 residential properties built by David Wilson Homes and the refurbishment of racecourse facilities, was approved by West Berkshire Council yesterday.
The first phase of construction is due to start in spring 2011 and could take up to 10 years to complete.
Newbury Racecourse currently offers conference and meeting space for up to 1,000 delegates, 40 breakout rooms and 1,000sqm of exhibition space.
Sarah Hordern, managing director of property development and finance at Newbury Racecourse, said: "This is a positive and important step forward in pursuit of our strategy to improve our racing, hospitality, conference and events facilities. The regeneration of the site will also provide us with the opportunity to increase our contribution to the community and economy in the Newbury area and is expected to create around 300 jobs, many of which would be permanent jobs for local people."
The company that will operate the hotel has not yet been decided as planning is still at an early stage, added a spokesperson.