The B.C. government announced Habitat Housing Initiative has been selected to renovate the single-room occupancy buildings.
The hotels are more than 100 years old and need structural, plumbing and electrical updates.
The buildings were bought by the B.C. government over the last five years and are home to some of the province's poorest residents.
Other accommodations will be supplied for people who need to move out during the reconstruction, and the government says they will all have the right to return to their own units when the work is finished.
The provincial government is contributing more than $87 million for the projects, plus more funding for a 15-year maintenance period, while the federal government will contribute $29 million for the work.