The world-famous chain will operate a 140-plus bed development, planned for a site next to the Stadium of Light.
Sunderland City Council has acquired the land – between the Sunderland Aquatic Centre and SAFC’s Black Cat House office block – from the Homes and Communities Agency and the project will be handled by a newly-formed company, Sunderland FC Developments.
The firm is affiliated to SAFC, and club personnel will be involved in the scheme, but is a separate venture and the development will not be funded from club coffers.
Public consultation will be carried out in the next few weeks, with the aim of submitting a planning application next month.
If the application gets the green light, work on site would start early next year, with an anticipated opening date of summer 2015.
City council leader Coun Paul Watson said: “This is a very exciting development for Sunderland and a statement of confidence in our city and its future, by arguably the most famous hotel chain in the world.
“Having such a quality hotel on Stadium Park will have a tangible economic impact on our city, and particularly its city centre.
“Stadium Park, through the Stadium of Light and the Aquatic Centre, welcomes hundreds of thousands of visitors each year, through football matches, concerts and other major events and this extra hotel provision will unlock further growth and development in the city through leisure and business tourism.”
Construction is expected to create up to 150 jobs, while the hotel will provide 100 posts itself, along with more in its supply chain and once completed.
North East Chamber of Commerce chief executive James Ramsbotham said Sunderland was crying out for the sort of accommodation a Hilton Hotel would create.
“I think this is great news,” he said.
“One thing we have been waiting for in Sunderland for a long time is more hotel accommodation and a hotel of this brand coming to Sunderland is a real show of confidence in the city.
“From a business point of view, there are lots of great businesses in Sunderland, always bringing new clients and customers into the city, and not being able to offer accommodation of this kind has not helped. This development will really address that.”
The news also get the thumbs-up from the Sunderland City Centre Traders’ Association.
Spokesman Giles McCourt said: “We are all too aware that the city needs more investment for national and international brands to aid its economic growth.
“The fact that Hilton, an internationally-renowned brand, has earmarked Sunderland for a new hotel is great news for the city centre and the city as a whole. A new hotel will not only aid retail, but it will also boost the night-time economy of the city.
“There are certainly exciting times ahead.”
City bosses have identified a lack of hotel accommodation as a major challenge, with visitors attracted to Wearside by events such as the airshow and the Stadium of Light concerts forced to stay outside the city.
Recent months have seen steps taken to tackle the problem.
A new Travelodge opened in High Street West in November, while planning permission has also been granted for another development at the bottom of Chester Road, which will transform the site between Sunderland University’s Chester Road campus and St Michael’s Way.