The US First Lady will visit the city of Granada, the former seat of Moorish rule in Spain which is located some 180 kilometres (110 miles) north of Marbella, on Thursday, a spokeswoman for the municipality said.
She will take in the Alhambra fortress-palace, Spain's most-visited tourist attraction, as well the city's cathedral and the hilltop Albaicin quarter of narrow alleyways and small squares, the spokeswoman added.
Earlier on Wednesday the hotel's owner Ricardo Arranz told public radio RNE that the Obamas had reserved 60 rooms at the hotel for themselves, their friends and their extensive secret service detail.
"Everything is ready," he added.
In recent days local officials have had roads re-paved, gardens tidied up and new streets lights installed while the hotel has flown a US flag at its entrance in the Obama's honour.
Dozens of photographers and reporters have staked out the entrance to the five-star hotel, where rates for a room run from 250 euros for a room to 5,000 euros (6,500 dollars) for a villa with 24-hour butler service and private pool and garden.
An Italian palazzo-style building about five kilometres (three miles) from the coast, the hotel has five restaurants, a spa and access to three 18-hole golf courses.
In an interview published Tuesday in the daily Diario de Sevilla, Arranz said the Obama family had asked "for no special treatment. All that they have asked for is discretion."
"More than nervous, we feel a huge responsibility to ensure that all goes well because of the repercussions the visit is having, which could be good for this hotel and for all of the Costa del Sol," he added.
Spanish PR firm Oak Power Communication estimates the visit will generate about 50,000 reports on radio and television and in newspapers around the world and provide publicity for Spain's southwestern Andalucia region worth around 800 million euros (one billion dollars).