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Wagamama has signed a 15 year lease with landlord DTZ Investors to take 7,701 sq ft of space in the city at a rate of £125,000 per annum.
The site will be the restaurant chain's first outlet in Edinburgh and its fourth in Scotland, having already established restaurants in Livingston, Glasgow and Aberdeen.
Simon Bashford, senior surveyor in Jones Lang LaSalle's Retail team, said: "There has been a real appetite for Wagamama to open in Edinburgh for some time so I'm sure this news will be greatly received by fans of the brand. 1 Castle Terrace is a very prominent site and an excellent location for the chain, providing it with access to both office workers and passing footfall from shoppers.
"The letting is also a further sign of positive sentiment in Edinburgh's leisure and retail market. There are currently a number of high profile requirements for space in the city, so we should begin to see some more deals like this come to fruition over the coming months."
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