Easy cover the opening with cement board and metal studs, cut a hole for the flue and use a regular stove instead of an insert.Inserts hang into the fireplace as compared to a stove sitting in the room.Heat stays inside instead of up the chimney.Caveat is you might have to run a stainless steel liner up the flue. But you are free to tile the cement board however you like.
It is no longer a fireplace, no need for damper.

Hi Jonny,

Thank you for your response. Unfortunately, my wife doesn't quite like the look of those stoves. She wants to maintain the aesthetic of a traditional fireplace in the living room. We also don't have much space to accommodate a stove in that particular room.

Anyone have any other options?

Thanks!

I recently visited a high end fireplace store that sold both gas and wood burning inserts. They told me I'd need a minimum of 18" depth into an 8" thick masonry surround, so if that's accurate, it looks like you'd have to add back some masonry to get that depth (and to get the desired finish around the insert).

The inserts have their own flues so you don't need the old damper.

I've got double - back to back fireplaces which are notorious for drawing poorly, and I'm planning on demoing one side to make more usable space in the family room and then placing a gas insert in the living room side. I'm in the Bay Area and wood burning has become increasingly restricted.

Did you do the demo work yourself with just a pick?

Looks like your plan is a go. I believe the logic for installing a damper is if the insert is removed the damper is installed returning it to it's original use, a fireplace.
Lastly a mantra that has served me well over the years "happy wife, happy life".