I would think as long as there is clearance for the wheel in the frame you would be fine. This doesn't sound like it would have the brake reach issues people have when going from 27" to 700c.
I am looking at doing something like this, but sort of reversed. I have an old mountain bike frame that I am thinking about setting up with a 26x1 3/8 3 speed wheel from a salvaged bike. It will need another spacer, but fits in the drop outs fine.