The renovations would see the building’s bottom five floors reserved for hotel use, raising its tally of rooms from 73 to 104.
Its derelict fourth floor would be reclaimed as part of the upgrade, with a fifth floor built for the new apartments – topped with a new roof.
The plans overwrite previous ambitions to convert the Queens Hotel’s second, third and fourth floors into 30 residential apartments.
Hotel director Farid Yeganeh, who took over the Queens Hotel in March, 2017, said: ‘I have been involved in hotels all my life and when the opportunity came about to buy the Queens Hotel I leapt at the chance.
‘To me she epitomises style and I could see the potential to return her to her former glory.
‘I see myself as a custodian of this beautiful building and I want to do all I can to keep her as a hotel for future generations to enjoy.
‘The desire is to have up to 104 bedrooms and for her to be Southsea’s only four star hotel.’
Queens Hotel bosses previously wanted to build 98 new apartments, including 30 in the hotel and 68 across two new buildings.
With the hotel building, which is on the corner of Osborne Road and Clarence Parade, now entirely accounted for, it is understood the plan will progress with 30 fewer homes.
One block of 30 flats is earmarked for Osborne Road, with an eight-storey, 38-flat block destined for land between Queens Hotel and Home Heights, in Clarence Parade.
Portsmouth councillors said earlier this year they were ‘short-changed' when the national planning inspector ruled the developments would not include affordable housing.
Planning permission has already been granted for a new spa and pool in the Queens Hotel’s basement, alongside conference facilities, two new shops and two ornate entrances on its disused Osborne Road side.
One of the shops will be a patisserie with a ‘top pastry chef’, serving a cafe and the hotel. The other unit’s use is currently undecided.
Bosses said millions have already been spent working on rooms on the hotels' ground and first floors after ‘years of neglect and cutting corners'.
A fly-through video, above, illustrates how the Queens Hotel could look after its proposed renovations are completed.
An application for the new plans is yet to be submitted to Portsmouth City Council.