Castle House will become a £3.5m incubator for digital start-ups in a move set to boost the tech sector and a rundown area of the city centre.
The former Co-op in the Castlegate area is set to have an interior makeover before welcoming small firms specialising in software, hardware, 3D printing and product design.
Cash for the project was announced in the Budget in 2015. Last year, Sheffield City Council ran a competition which attracted pitches from several organisations, including some from outside the city.
Kollider Projects, based in Sheffield, won. It is led by lawyer Adrian Hackett of Freeths and entrepreneurs Steve Pette and Nick Morgan, although it is understood the contract should be finalised in coming weeks.
The five-storey partly-listed building on Angel Street has been empty for several years. As well as bringing it back into use, the council hopes it will help regenerate the Castlegate area following the demolition of Castle Markets.
Digital jobs are seen as a key growth sector with the potential to generate a high skilled, well paid positions.
A council spokeswoman said: “This funding will help establish a new facility providing work space, business incubation and other services for entrepreneurs and small and medium sized businesses who rely on digital technologies and their applications.”
The council-owned Electric Works on Sheaf Street provides a similar service but it is almost full.
The funding was part of £11m for tech incubators in Leeds, Manchester and Sheffield and ‘creating or safeguarding an estimated 6,000 jobs in 10 years’.
Mel Kanarek, of business group Sheffield Digital, said it could be a “gamechanger.”
“We believe the digital incubator and the activity it generates could be a gamechanger for the city and the wider region.
“We feel that it should create an identity that is true to the history, capabilities and innovative spirit of our city – one that sets it apart from other digital technology hubs around the world.
“We know Sheffield lags behind other cities in our ability to create and nurture new businesses.
“We don’t have enough people starting up new businesses and, of the ones that are, too few of them go on to grow into substantial, successful companies.
“However, we have masses of talent and a reputation as a place where people create, make, design, develop, and generally solve problems as well as anywhere else in the world.”