The Hallam Tower hotel in leafy Broomhill has been disused since 2004, when it closed as a Holiday Inn, and has since fallen into dereliction while awaiting a proposed housing development.
The landmark structure, which is a prominent feature on the Sheffield skyline, opened in 1965, ready for Sheffield hosting early stages of the 1966 World Cup.
Planning permission to convert the tower into apartments and build townhouses in the grounds was granted almost three years ago but, since then, the building has increasingly been attacked by vandals.
An action group has since been formed to pressure the owner, Hallam Grange Ltd, to improve its efforts to secure the site.
Mr Clegg said that residents are “seeking a long-term solution”.
He added: “Whilst the short-term fix is welcome, Sheffield shouldn’t have to put up with this blot on the landscape for any longer.
“The decaying and vandalised building can be seen for miles around, including in areas I represent like Fulwood, Crookes and Greystones.
“It causes untold misery for nearby residents.
“The local authorities need to be more assertive and use the full range of powers at their disposal.”
Local campaigner Cliff Woodcraft described the derelict hotel as a “source of stress and misery for local residents living nearby, which includes many elderly and disabled people.”
He added: “The council and the owners should work together so that this eyesore does not blight the local community for another decade.”
Images of the smashed-up interior of the former hotel were posted on the internet last year by “Urban Explorers”, a group which says it aims to “experience maneuvering mazes and obstacles of days gone by”.
After opening as Hallam Tower, the hotel in Fulwood Road was later the Hallam Tower Post House Hotel, the Forte Crest Sheffield and the Posthouse Sheffield before, finally, the Holiday Inn Sheffield West before it closed almost a decade ago.