Work will start before winter on turning Walkley Library into a shared venue featuring a café bar.
Councillors granted the True North Brew Co planning permission for the project last month.
The firm has bought the Grade II listed building on South Road, and will lease an area back to the council to be run by volunteers as a library space. The library was handed over to volunteers in 2014 following budget cuts.
True North will repair the building, create a mezzanine floor inside and add an extension with kitchens, offices, toilets and a cellar.
The company has also promised to raise £6,000 per year towards library services. Work to renovate the windows and improve disabled access will start before the end of this year, with the extension and café bar set to open in 2017.