The Ritz hotel in central London is set for expansion after buying one of the capital’s most famous townhouses next door.

The hotel has acquired 22 Arlington Street, better known as the William Kent House, as it approaches its centenary next year. The mansion, which has been bought for an undisclosed sum, is renowned as one of the last great townhouses in London.

The Ritz, which is owned by the Barclay brothers, intends to carry out an extensive refurbishment of the grade I-listed building, which has six lavishly decorated reception rooms. The ground floor will be renovated in keeping with its present decor and turned into a venue for private dining and corporate events.

Two penthouse suites will be created on the second floor, with a banqueting kitchen and bakery operation housed in the basement.

Renovation works are expected to take six to eight months before the house is reopened by the Ritz early next year. The purchase of the 18th-century mansion brings to an end a saga that stretches back to when the hotel’s founder, Cesar Ritz, first tried to buy the house 99 years ago. Ten years ago the Barclay Brothers reportedly tried to buy it for £100m.

Andrew Love, deputy chairman of the Ritz, said he was thrilled to have acquired the house.

He said: “We are looking forward to restoring William Kent House to its former glory and to using the rooms again for the purpose they were built, for entertaining in a very grand manner.”