The demolition of Grosvenor House Hotel is to start within three months in preparation for the Sheffield Retail Quarter build.
Sheffield Council had hoped to knock down the former hotel in December 2015 after a planning application was submitted in September last year.
The plans to knock down the site is part of a new retail, commercial, leisure and residential scheme which is expected to cost £480 million with completion of the first phase in 2019.
But an agreement for key partner John Lewis to move from its current site in Barker’s Pool has yet to be reached. Sheffield Council say talks are ‘on-going’.
The block - considered a key element of the quarter - can be made bigger or smaller depending on occupier demand.
Simon Green, executive director at Sheffield Council said: “We are making real progress and remain on course to deliver the first phases of the SRQ by 2019. People will see a visible start to preparatory demolition works of the Grosvenor Block within three months after all the asbestos has been removed. We are in active conversations with John Lewis and expect to announce the first phase of the SRQ very shortly involving retail and a major blue chip company.
“Bringing jobs and the spending power they deliver right to the very heart of the city helps to make the retail element far more attractive to retailers and will help stimulate further office development in the area as well as our restaurant, bar and hotel offer. This is a hugely complex scheme but we are working hard to deliver this project which is so important for the future of the city.
“Over the coming months work will be undertaken to refine the design for the proposed scheme which will be shared with stakeholders and the general public as part of further consultation.”