As comments seem to have ascertained it was once a chimney, you should not cover it. It needs to breathe.
Judging from the photo*, in times past it had been correctly covered with a map-vent though a more recent trend would see it replaced with an air-brick set flush to the current plastered surface. It can be painted to match, but shouldn't be sealed off completely.
*It's exactly the right height & dimensions to be a chimney vent & you can see it used to be covered with a map vent.
Why it needs to breathe - it prevents moisture buildup which can lead to damp penetration on the entire chimney breast & also helps prevent that moisture reacting with the old soot, causing a sulphate reaction which will attack the mortar.
Strictly, you should have the chimney swept first & cap the top of the stack with a 'rain hat' preventing direct rain ingress whilst still allowing it to vent.