De Niro was recently diagnosed with prostate cancer

The Taxi Driver and Raging Bull star, who was born in the city, will spend an undisclosed sum on the six-story hotel.

Building work is set to begin in early 2004, and is aimed at helping boost the area after it was ravaged by terror attacks on 11 September 2001.

De Niro, 60, is part of the 377 Greenwich LLC group that will manage the hotel once it has opened.

The area was devastated by terror attacks

Charles Gargano, president of Empire State Development, which oversees new construction in New York state, said: "I thank Robert de Niro for all he continues to do for Lower Manahattan."

The actor has consistently shown support for the region and founded the Tribeca Film Festival in 2002 as a way of promoting culture and tourism in the downtown districts of New York that were suffering in the wake of the attacks.

During his 40-year career, De Niro has made more than 60 films, winning two Oscars, and receiving four other nominations.

He got best actor for his 1980 role as boxing champion Jake La Motta in Raging Bull, and best supporting actor in 1975 for the young mafioso Vito Corleone in The Godfather: Part II.

De Niro was diagnosed with prostate cancer last month and is expected to make a full recovery.