The palace announced that it has chosen Ducasse and the luxury hotel group LOV Hotel Collection to transform three buildings on the royal grounds into a high-end hotel and dining destination.
The property will feature around 20 rooms and a fine dining restaurant led by the world renowned chef, with décor remaining faithful to the opulent, lavish style of the 18th century.
The trio of buildings, which have stood empty since 2008, are located in the southeast area of the palace grounds and served as the king's Ministry of Finance and a military mess for soldiers since opening in the 17th century.
Renovation costs are estimated to hit between 4 million and 7 million euros. An additional 4 million euros are to be allocated to the interior.
Ducasse and the LOV Hotel Collection were chosen from 20 contenders who submitted tenders from around the world.
The Lov Hotel Collection currently boasts six historic addresses, including Les Airelles in Courchevel and La Bastide de Gordes in Luberon.
The hotel is expected to open in 2018.