The owners of Oughtibridge Paper Mill have appointed a property company to advise on the potential sale of the site after it closes in 2015.
SCA and property partner Capita say they intend to review the estate and consult with stakeholders over its future.
Paul Oliver, SCA programme manager said: “An important part of the brief is that, as an ethical company, we want to exit the site responsibly and with consideration for the views of the local community and of the environment.”
Oughtibridge residents are concerned it may be used for housing – which they say would put strain on services.
Swedish firm SCA took over the mill after buying Georgia Pacific’s European operation in 2012.
It is one of Sheffield’s largest and most historic employers. Some 161 jobs face the axe when it closes.
The site dates back to Victorian times, when it was founded as Dixon’s Mill, and employed thousands.