The council said it had already been paying the previous owner of the Harper Hotel, in Fordbridge Road, nightly rental rates to place homeless people.
It said the hotel would provide accommodation for up to 20 households, once it had been refurbished.
Cllr Jean Pinkerton OBE, cabinet member for housing, said the property will increase their flexibility and allow them to provide a good facility for Spelthorne’s homeless households.
“Being forced to move out of the borough can be very disruptive and remove people from their support network,” she said.
“Having a fixed number of accommodation units here in Spelthorne will be extremely positive for all concerned.
“Financially speaking, the provision of emergency and temporary accommodation represents a significant expense for the council so it’s important that we continue to explore innovative ways to reduce these costs.”
In the last financial year, Spelthorne has spent £484,000 on temporary accommodation and currently has 1,400 families on its Housing Register.
Councillors agreed to increase the council’s borrowing from £6 million to £35 million to buy properties for homeless people and affordable housing during the April 7 extraordinary council meeting.
Cllr Ian Harvey, leader of the council, said: “Since taking on the role of leader, I have been determined to improve the availability of local emergency accommodation so I’m delighted that we have completed on the purchase of this particular property and can provide better support for vulnerable people in our borough.”
There are currently 74 families in bed and breakfast accommodation with the figure reaching a high of 104 in August 2015.
The council says it costs it £6,000 a year for each family it provides bed and breakfast accommodation for.
Paul Mitchell, chief executive of Transform Housing & Support, said: “We are very pleased to share our knowledge and experience with the council to support them in setting up this much-needed project.
“The new service will give homeless families a place to stay within the local area, instead of in accommodation out of the borough.
“When people have to move out of their local area there are practical issues around work and school – but also an emotional impact in terms of losing links with family and friends.
“This project gives people a temporary home so they can maintain stability for their family and have time to find more permanent local housing.”