The skyscraper will have 70 floors and will be built by Distrito Castellana Norte (DCN) as part of a project that will include another five towers along Madrid’s Castellana.
The scheme was announced by the head of the project, Antonio Béjar, on Wednesday.
The six towers will "form a balanced and sustainable urban environment" according to the company behind the project.
The skyscrapers will "transform the city’s skyline and put Madrid among the main European capital cities," Béjar said.
Madrid's current tallest building is the Torre de Cristal, one of the four towers that make up the city's business district, at 250 metres tall.
The project has yet to be signed off by Madrid’s City Hall, but Béjar said he was confident they would receive an answer before the end of the year.
"The project is closer than ever to starting," he told Spanish daily El País.
DCN is a project that is already 20 years in the making (previously under the name Operación Chamartin) and involves extending the Castellana - a major road through the north of Madrid - by 3.7 kilometres and developing a 311 hectare plot.
The development, of which 75 percent is financed by the Spanish bank BBVA and 25 percent by the construction company San José, will cost an estimated €6 billion and create 120,000 jobs.
Around 80 percent of the area will be dedicated to public space and green zones, while the remaining 20 percent will consist of offices, houses and commercial properites.
The area will also include new metro and cercanías links as well as over 13 kilometres of cycle paths.