The former Coroner's Court building on Nursery Street was found burning at 10.40pm yesterday and at the height of the blaze there were five fire engines at the scene.
The first floor of the disused building was engulfed in flames and crews spent three hours battling to prevent the fire spreading.
South Yorkshire Fire and Rescue said the blazeÂ is believed to have been started deliberately.
It broke out two months after plans to demolish the building were shelved.Â
Firm Firestone Developments had applied to Sheffield CouncilÂ for permission to demolish the building to redevelop the land but later withdrew its plans following a number of objections from groups and organisations keen to preserve Sheffield's heritage.
At the time of Firestone's withdrawal, Councillor Jack Scott, Sheffield Council's cabinet member for development and transport, said the council would continue to work with the firmÂ 'to discuss a better scheme that is more in keeping with our values as a city.'
He added: "We are seeing huge and very welcome development in this part of the city, which is a sign of great confidence in Sheffield as a whole. But the old Coroner's Court is a special building and so it's right that we examine any proposal to demolish it very carefully.
'Sheffield's heritage is unique, and plays a key role in the future economic success of our city. Heritage should only be lost when there are overwhelming reasons to justify it.
"That hasn't happened in this case yet. We had a number of concerns about this application, which we shared with the developer. I'm pleased they've now taken our advice and are going to come back to discuss a better scheme that is more in keeping with our values as a city. We are looking forward to working with them on this.'
The building was built in 1913 as aÂ court, mortuary, post-mortem rooms, viewing chapel, witnessÂ waiting rooms and police accommodation.
Bomb damage during the Second World War led to a remodelling in the 1950s and youth court facilities were added to the site.
It later became used as a business centre but is currently vacant.
An investigation is underway.