The current tenants of the 1980s office block at Westminster Tower on Albert Embankment include the Westminster Live television studios, home to the nightly GB News show hosted by former UKIP leader Nigel Farage.
In 2014 Lambeth Council gave the green light to plans to convert the Westminster Tower into luxury apartments.
The council later agreed that the scheme's affordable housing contribution would be built off-site in nearby Spring Mews SE11.
In 2021 building owners CLS Holdings applied to the council to swap that obligation for an in-lieu payment of £2.25 million.
Negotiations between the developer and the council led to a final sum of £3.8 million being agreed, to be paid within 28 days of the deed of variation being signed.
The funds will be ring-fenced for new affordable housing in Lambeth.
Lambeth planning officers agreed the proposed in-lieu payment this week.
The permission for residential conversion of the Westminster Tower was deemed to have been 'implemented' in 2017 even though no major works have commenced and the building remains in office and TV studio use.
Lambeth Council's report on the application notes that there is some doubt about whether the residential conversion will ever take place, as CLS is now focussed on commercial developments.
• This article was updated on Friday 10 February to clarify that there is no suggestion of any imminent change to the existing use of Westminster Tower by its current TV studio or office tenants.