The Carnival Films show debuted in 2006 and has garnered consistently strong ratings throughout its run.
The show is based on Imogen Edwards-Jones's book about the life of staff and guests in London's five star hotel industry.
Gareth Neame, managing director of Carnival said: "We are delighted that BBC One has re-commissioned the show as it is so popular with the audience. It has become a global brand and we look forward to delivering even more exciting and contemporary storylines in season four."
Sarah Brandist, BBC Commissioning Editor of Independent Drama, added: "We're really thrilled to be opening the doors of Hotel Babylon for another series. Audiences have continued to love the show this year and future storylines promise a truly explosive fourth series!"
The new run, which airs in 2009, will see the return of cast members Dexter Fletcher and Emma Pierson, along with several new characters.