An agreement was struck weeks ago and on Tuesday, city council signed off on it.
Along with the sizable kick-in from the city, Thompson is putting up 259 million dollars to redo the historic Beach landmark.
If the city hadn't pledged money, Thompson threatened to tear down the property, build a new hotel, and timeshare it out.
Now the iconic Cavalier front lawn, with the hotel's name spelled out, will be preserved.
There are still major changes to come to the property.
100 cottages will be built, and the properties will be patterned after East Beach in Norfolk.
The hotel at the Oceanfront may be torn down while the older Cavalier Hotel, a block away, will have its interior renovated and 90 rooms will be put in.
This work will begin in the fall.