THE West Australian Government today announced that Mirvac has been selected by LandCorp to develop a $50 million hotel resort and residential development in the Pilbara region.

Lands Minister Brendon Grylls said the development of the hotel was a State Government priority and a boost for the Town of Port Hedland, given the urgent need for accommodation of this kind in the area.

The Mirvac development will comprise a high quality 'Sebel' style 178-room hotel resort and adjacent residential development of more than 100 residences.

Mr Grylls said hotel accommodation had been lacking in Port Hedland, hampering the region's economic and social development.

"Developments like this hotel are central to helping Port Hedland in its evolution into becoming the Pilbara's Port City," he said.

"The hotel will serve as a catalyst and benchmark for future investment in the region."

The resort-style hotel will include a central facilities building featuring a restaurant, bar, cafe, function and conference space, gym, pool and gardens.

The government said the development will create an entrance statement for Port Hedland and assist the revival of the west end of the city. Construction is expected to commence mid-2012.

The government also said it has agreed to key commercial terms and is in the final stages of negotiating detailed agreements with Mirvac.