The hotel, which will be similar in style to Isrotel's Carmel Forest Spa Resort, will be the first to be built in the area for decades.
The Tourism Ministry's Investment Administration has approved 16 requests for aid in building hotels and rooms across the country, or renovating and turning buildings into hotels.
The total investment in these projects is estimated at NIS 720 million ($190 million), and the Tourism Ministry's participation will amount to NIS 50 million ($13 million).
The boutique hotel about to be built at the Carmel Forest will join additional hotels planned in northern Israel, including a 35-room hotel on the beach of Haifa's Bat Galim neighborhood, an 11-room motel in Moshav Shtula and a 60-room hotel in Rosh Pina.
Tourism Minister Stas Misezhnikov says that improving the tourism experience is at the top of his ministry's list of priorities for 2012, and that a significant component is value for money.