An outline planning application has been lodged with Sheffield Council which would see Claremont House, in Storrs Bridge Lane, turned into six apartments, each with two or three bedrooms.
Previously, a planning application to turn the building into nine apartments was submitted, but the plans have since been scaled down to include just six flats and 12 parking spaces, gaining access off the currently blocked Storrs Bridge Lane.
To create the apartments, the existing three-storey stone building would be kept and an extension would be built, in matching materials, on the west side of the detached house.
In the past, the building was used as a country house and is set in extensive grounds that once contained tennis courts, greenhouses and gardens.
It was later converted into a social club, but has been vacant for a number of years and has now fallen into a state of dereliction.
Claremont House is now boarded up and in a state of disrepair, while the once-grand gardens have become overgrown.
Although planning permission was granted in 1994, 1999 and again in 2007 to convert the building into a nursing home, this consent has since lapsed.
Objections to the latest scheme have come from groups including Bradfield Parish Council, Loxley Valley Protection Society and Loxley Valley Design Group.
The planning officer for the Campaign to Protect Rural England (CPRE) South Yorkshire, John King, said: "Although in a poor state of repair, Claremont House is a large traditional property of historical interest within the Loxley Valley.
"This valley is an attractive area of Sheffield's green belt, which is valued by residents and forms an important buffer between the city and the Peak District National Park.
"The scale of the extension will have an adverse impact upon the character of Claremont House, the green belt, the Area of Special Character and the Area of High Landscape Value."
Jan Symington from the Loxley Valley Protection Society said: "This property in the green belt, which has been allowed to fall into a derelict state, has already had permission for conversion to a nursing home.
"This permission could be resurrected, given the needs of an ageing population and the recent application for a dementia care home in the valley.
"This would be considered an acceptable green belt use.
"Conversion of the existing buildings would be acceptable. However, the proposal to demolish the other buildings and replace with a large new build extension which, we would argue, exceeds the amount allowable in the green belt, is not.
"The proposed new build is huge, even taking into account the footprint of the buildings to be demolished."
Another objection has come from a local resident, who said granting planning permission would be the "tip of the iceberg" for other residential developments in the area.
The resident added: "The building in question is part of the history of the Loxley Valley. It would make a beautiful home and I would not object to a restoration project turning it into a single dwelling for its owners, and restoring it to former glory."
City planners in Sheffield have agreed with objectors and recommended that councillors refuse planning permission when the application is considered at a meeting at the Town Hall this afternoon.
In the report set to go before that meeting, the planning officials say the development would "not improve the openness of the green belt" and would also "not result in a sustainable development" due to the isolation of the rural site.