The Jerusalem post reports that in a statement, the Jerusalem municipality said it would be constructing a new tower on the former site of the old Temple Mount, known as Har Adar, for a construction company that will also be constructing an extension to the Jerusalem Tower, which was inaugurated in 2010.
According to the post, construction is scheduled to begin in 2019, with the new building completed in 2021.
The Israeli media reported last month that construction of the tower was underway.
The site has been occupied by the Old City since the Second Temple period, when the Jewish holy site was destroyed by the Romans in 70 AD.
The building was converted into a Jewish quarter in the 1980s.