Park Hill flats developer Urban Splash has announced a £17 million investment into the second phase of the renovation project.
A further 182 homes will be created as part of the next stage, along with a new nursery and workspaces.
The developers are working as part of a joint venture with Places for People.
Simon Gawthorpe, managing director of Urban Splash, said: “We are delighted to unveil the latest plans for Park Hill and the new residential opportunities that we’ll be launching there.
“We were overwhelmed when we launched the first phase in 2012 – more than 1,000 people came to see the show apartments when we launched them, and they have all now been sold.
“I have high hopes for phase two and look forward to welcoming more people into this re-emerging community.”
The first residents moved into the flats in early 2013, when the developer pledged to continue with the £160 million redevelopment despite financial problems.
The second phase of the revamp will feature 85 one-bedroom, 93 two-bedroom and four three-bedroom properties.
Sheffield Council cabinet member for homes and neighbourhoods, Coun Harry Harpham, said: “Park Hill is a flagship development in Sheffield, both because it’s so visible from many parts of the city and because it has such a rich and fascinating history.
“We are delighted the next phase of works is underway and that it continues to re-emerge as a modern place to live and work.”