Killeavy Castle was sold at auction for £1.19m in March, 2013.
It was bought by an Australian couple who have strong links to the Killeavy area of south County Armagh.
They have appointed architects to design a 36-bedroom hotel close to the castle and to restore the 19th century listed building "to its former glory". They said it could create 85 jobs.
The couple, who wish to remain anonymous, are hoping to apply for planning permission for the project early next year.
The castle has not been occupied for more than ten years and was sold in a poor state of repair.
The 330-acre estate backs onto the slopes of Slieve Gullion and includes a farm and woodland. In a statement, the new owners said,
Our vision is for Killeavy Castle and Demesne to be restored to its former glory, within a financially viable hospitality and agriculture business, so that it can be maintained and be available for use by the public for many years into the future.It is understood there are plans to incorporate the two-storey castle into a new wedding venue.
The couple have appointed a design team which is being led by Newry-based architects P O'Hagan and Associates.
The owners said the team also includes,
conservation surveyors, hotel and hospitality consultants, quantity surveyors, landscape architects, structural, mechanical and electrical engineers, arboricultural and transport consultants. As you can imagine the plans for the site are still developing and are at an early stage. We think we know what will be successful, but the team is working with various statutory bodies, including Northern Ireland Environment Agency (NIEA) Invest NI and Newry and Mourne District Council, to refine the plans and ensure a sustainable development for Killeavy Castle and Demesne.The couple have strong family ties to the area as the man's parents both grew up within four miles of the castle, before emigrating to Australia in the 1960s.
The owners said they have been regular visitors to south Armagh over the last 30 years and have lots of family and friends living in the area.
Killeavy Castle started life as a country farm house, built in a gothic style by the Foxall family between 1810-20.
In 1836, Powell Foxall commissioned the Dublin-based architect George Papworth to extend the building, adding four stone towers, outbuildings and Tudor-style windows.
The extended 4,000 sq ft house then became known as Killeavy Castle.
By 1881, the castle was the home of the Bell family, who owned it until recently. It is located within a government-designated Area of Outstanding Natural Beauty (AONB).