Government says the submisison of a planning application for the former bus station site on Lord Street site is an "important milestone".
Developers Kane Limited have put forward plans to transform the car park site in Douglas.
Subject to planning approval it is hoped work will begin on the £25m hotel and cinema complex next year.
Infrastructure Minister Ray Harmer says: "If approved this development will give North Quay a clear focal point, which is so important on one of the key entrance points to Douglas.
"It will create a strong asset for the town centre, a hub of activity with new jobs and facilities which are key objectives within both the Programme for Government and Central Douglas Masterplan.
"I very much look forward to work beginning next year."
The development features:
- 7-screen Omniplex cinema
- 80-bed Travelodge hotel
- 3 restaurants
- 20 residential units
- 4 retail units, which may be changed to become 2 larger units
- 6-storey car park
Agreement for sale was reached with Kane Limited in December 2017 for the freehold purchase of the site from the Isle of Man Government.