Leeds City Council has approved plans for the the Grade II-listed Burley Library in Cardigan Road to be converted.
ParkLane Properties and agent Yeme Architects are due to create a "co-working, training and enterprise hub" for young professionals, who would also live at the building in apartments similar to student accommodation.
The space is hoped to provide a place for local entrepreneurs and freelancers to "work more collectively".
This is how much it costs to live in Leeds compared to 14 other citiesIt involves a five-storey extension to form 60 flats, with a work area on the ground floor and basement car parking.
There will also be five communal "mega-kitchens".
The work space is also due to be available to members of the community.
A statement on behalf of the developers reads: "The library building is to largely serve as a new co-working, training and enterprise hub, serving the buildings residents and will be available to the local community.
"It is proposed this facility will support and encourage local entrepreneurs and freelancers to work more collectively through the nature of the facilities.
"It will also offer accredited training provision for apprentices and residents.
The statement adds: "The proposed apartment development is similarly innovative, by creating a more supportive and interactive housing solution aimed at young working professionals.
"It can be seen that many young people appreciate the convenience, security and social aspect of managed student accommodation facilities but are compelled to leave at the end of their studies.
"This proposal offers an opportunity for young people to remain in similar accommodation once they begin their professional careers.
"This helps retain more students in Leeds after their studies and helps foster a more sustainable local community."
It adds that co-living is a new concept that is "becoming increasingly popular" among millennials in cities around the world who have grown up with technology and social media.
"As cities have generally become more expensive, denser and in many cases more isolated, more and more young people demand greater flexibility and social interaction," said the statement.
"The co-living model represents more of a social space where young people can hang out with like-minded friends.
"Such young people invariably see less distinction between work and pleasure.
"This has led to a generation of ‘digital-nomads’ who are travelling frequently or happily relocating for work.
"This is driven by a desire to seek new experiences and they value being part of a community."
Cohousing group’s fears over plans for new north Leeds through-schoolGilbert Burdett Howcroft of Uppermill, Saddleworth, designed Burley Branch Library, which was opened on June 15, 1926 by Alderman Sir Percy Jackson, chairman of the West Riding Education Committee and a trustee of the Carnegie United Kingdom Trust.
The library cost £8,338 to construct, with most of the funding coming from the Carnegie Trust and the rest from Leeds Council.
The designer was a lieutenant in the First World War and colonel in the Second World War, and designed the Grade II-listed war memorial obelisk on the top of Alderman’s Hill in Saddleworth.
He was later president of the Manchester Society of Architects between 1953-5.
The library closed in February 2016, and was then used as the temporary site office for a neighbouring student flat development.
It was subsequently Grade II-listed in 2017.
The planning statement continues: "This proposal represents an invaluable opportunity to restore and appropriately repurpose a significant listed building in the heart of a residential community.
"The scheme enhances the facilities available to residents and the wider community. The proposal also offers a visionary approach to co-living for young professionals helping to retain more people in Leeds after completing their studies."