Hillsborough Shopping Precinct, described by developers as 'tired and dated', will be refurbished with a scheme which will boost the local economy.
Councillors have unanimously approved outline plans for the site of the former Old Blue Ball pub next to the arcade of shops bordering Bradfield Road, Middlewood Road and Proctor Place.
Wilkos will be demolished to make way for 77 social housing apartments.
Developers will partially demolish the shopping centre closest to Bradfield Road and create a five storey building with ground floor shops and 'genuinely affordable' apartments.
The building partially replaces a section of the current shopping centre, including Wilkos, and fills in the gap up to Lloyds Bank.
Indicative plans show the apartments would be made up of 36 one-bed, 39 two-bed, and 2 three-bed.
The existing shopping centre currently has 96 rooftop parking spaces. These would be reconfigured to 88 spaces '“ 30 for the apartments and 58 for shoppers, accessed from Proctor Place.
Matthew Sobic, speaking on behalf of the developers, told the planning committee that the high quality proposals were the culmination of two years of work and had the support of officers and local councillors.
'This will enable the redevelopment and refreshment of Hillsborough shopping centre,' he said. 'It will provide a new and enhanced retail facility and sustainably located homes that will be genuinely affordable with a legal agreement in place to ensure this is the case.
'The existing development is tired and dated and no longer meets the requirements of occupiers. Providing a new, modern floor space will provide Hillsborough with the opportunity to enhance its retail profile within Sheffield to the benefit of the local economy.
'This is a positive development that benefits Hillsborough and the wider Sheffield area by providing new shops, homes and jobs in a sustainable and accessible district centre location. We are keen to invest at the earliest opportunity.'
There were concerns from local residents that only 30 parking spaces are allocated for the apartments but officers said the area had excellent Supertram and bus links.
Residents on Hawksley Avenue say they already struggle to park and fear the apartments could make it worse but officers say future residents will not have access to the Residential Permit Scheme in Hillsborough. This will restrict new residents being able to park on adjoining roads, including Hawksley Avenue.
The demolition of the Old Blue Ball saw the loss of one of the oldest pubs in Hillsborough. It dated back to around 1824 and was part of the Great Sheffield Flood. An original plaque acknowledging this was retrieved and will be reinstated within the new development.
Details of the development, such access, appearance, landscaping, layout and scale, will be considered at a later date.
Coun Peter Price said: 'This is a nice addition to the area and will lift it quite a bit. It will bring more footfall and be a good addition to the economy for the local shops and for Sheffield.'