Campaigners who had battled for a number of years to save the Grade II Listed building off Low Lane have now accepted that it is beyond repair.
Gregory Property Group has won planning permission from Leeds City Council to demolish the derelict building and use existing stone to create high quality residential apartments at the site.
The former water powered corn mill was built between 1772 and 1787 by William Wright.
It was previously used as an auto spares scrapyard, but has been empty for the last ten years.
It is now in a very poor state of repair with only a part of the original building still standing.
Leeds-based Gregory Property Group plan to reuse some of the existing stone to create what they say will be a “new and attractive building offering 13 high specification apartments with parking.”
Andrew Foggitt, director at Gregory Property Group said, “We have owned the building for a long time and spent many years working with local interest groups to find a practical solution for the property.
“Given that the building is located in a popular residential area we feel that this will offer alternative new homes with exceptional character maintained from the original building.”
Councillor Chris Townsley (Lib Dem/Horsforth) had previously called on residents to oppose the plans.
Coun Townsley, who is president of Horsforth Historical Society, said: the building has steadily fallen into disrepair in recent years, adding: “We are happy they are going to use all the stone in the new building. But it’s a poor compromise. I’m still annoyed and upset that it can’t be saved.”