A contractor is set to be appointed to knock down Barker’s Pool House on Burgess Street.
Officials examining the building last week said work was due to start within two weeks.
The 1970s building and the bridge connecting it to the John Lewis department store will be cleared away as part of the Radisson Blu development. The upmarket hotel will face Pinstone Street, and the historic frontage will be retained.
The former Embrace nightclub on Barker’s Pool and adjacent to Barker’s Pool House will be revamped.
A council spokeswoman said the core structure would remain but the red steel frame would go.
She added: “Although the final use of the building is not yet confirmed, it is anticipated that retail will remain at the ground floor along Barker’s Pool.”
The site was home to the Regent Theatre which opened in 1927. It became the Gaumont Theatre in 1946. Following demolition in 1985, it became a cinema and then a nightclub.
Unveiling the scheme in September, Mazher Iqbal, cabinet member for business, said: “With a new Radisson Blu planned next door and with the great work taking place on Pinstone Street, I don’t think many people in the city would disagree that the existing look of the Gaumont is outdated and tired, and in need of a revamp.”
Sheffield-based HLM architects are working on both projects which are part of Sheffield City Council’s £480m Heart of the City project.