The pub, opposite the Bondgate Tower on the corner of Bondgate Without and Hotspur Street, dates back to the early 19th century.
A tunnel through the cellar is said to have been connected to Alnwick Castle as an escape route.
It is planned to remodel the bar area and renovate the existing toilets to make the pub ‘more commercially viable’.
No objections were made.
James Hudson, senior planning officer, reported: ‘It is considered that the proposals are of an appropriate design in relation to the host property and represent an appropriate form of development that would not have a significant adverse impact on the appearance of the property, the street scene or the amenity of nearby residents.’