Sydney's iconic Imperial Hotel is planning to host LGBTI weddings once renovations are completed next year.

As News Corp reports, the popular Erskineville venue's $3 million renovations include the development of a "wedding grotto" and reception area.

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"We think the venue would make a great wedding destination," the hotel's co-owner and publican, Fraser Short, said.

Short confirmed plans to lodge a development application and has already begun talks with LGBTI acts and promoters about holding events and gigs at the venue. 

The venue is gunning to have renovations, which also includes works on two kitchens, a restaurant, a lounge bar and a courtyard area, finished in time for the 2018 Mardi Gras in March.