London's iconic BT Tower is set to become a hotel after the owner BT Group said it had agreed to sell the 177-metre building in the capital's West End to MCR Hotels for £275 million ($347 million).

The tower, opened by Prime Minister Harold Wilson in 1965, was London's tallest building for 16 years until the NatWest Tower in the City of London was built.

Its role in communications has diminished as fixed and mobile technology changes, and its microwave aerials were removed more than a decade ago as they were no longer needed to connect London to the rest of the country.

BT's Property Director Brent Mathews said the tower, which sits at the heart of London, had played a vital role in carrying the nation's calls, messages and TV signals.

"This deal with MCR will enable BT Tower to take on a new purpose, preserving this iconic building for decades to come," he said.

Tyler Morse, CEO and owner of MCR Hotels, said: "We are proud to preserve this beloved building and will work to develop proposals to tell its story as an iconic hotel, opening its doors for generations to enjoy."

(Reporting by Paul Sandle; Editing by Sarah Young and Jan Harvey)