More than 120,000 places reserved in hotels by Olympics organisers for workers, sponsors and the media during the Games will not be needed, it has emerged.
The London Organising Committee of the Olympic Games and Paralympic Games (Locog) confirmed that around 20% of the room nights they had booked would now be returned to the hotels for them to offer up to other customers.
As part of the bid to stage the 2012 Games, agreements had been struck with hotels to provide more than 40,000 rooms, representing more than 600,000 room nights during the period. Part of the deal was that the committee promised to return any unwanted rooms back to the hotels so they could sell them in time for Games.
The rooms, at more than 200 hotels, range from Five-star to budget accommodation.
Locog chief executive Paul Deighton said: "The hotel industry in London got behind the bid to stage the Games in the most extraordinary way and that support helped us across the line.
"We always promised that we would not hold on to hotel rooms we didn't need but return them to the individual hotels at the beginning of 2012.
"We are now doing this and I hope that this enables the hotels to continue with their planning for this summer as we all work together to stage a spectacular Games."
VisitBritain chief executive Sandie Dawe said: "We welcome the announcement by Locog that they will be releasing around 20% of the hotel rooms that they have held in advance of the Games taking place.
"The fact that such a wide spread of rooms in London will now be made available to the public is great news for overseas visitors wishing to come to the UK to experience the Olympics and all the other wonderful festivities that are taking place over the summer."
Barry Wishart from the Grange Hotel group added: "We were only too happy to support London's bid for the Games and we are proud to continue that support.
"Now Locog has confirmed these details, we are able to confirm our plans for this summer and help our customers be part of this extraordinary event."
Not everyone believes the news is so positive however, with some in the tourism industry warning that prices had risen too fast before the new rooms were offered and many potential visitors had now been put off from staying in the capital.
Neil Wootton, managing director of sightseeing operator Premium Tours, told the Independent: "Prices have been so high that tourists are moving elsewhere."
Last week, film director Danny Boyle revealed that the opening ceremony of the Games will be called Isles of Wonder.