South West Yorkshire Partnership NHS Foundation Trust has submitted a prior notification application to Barnsley Council stating its plans to clear the site.
The hospital closed in December after being declared surplus to requirements. Instead people who are not ill enough to be in hospital, but are too ill to go home are now cared for in a transition ward at Barnsley Hospital, and in the community.
The site will be left level, with material suitable for reuse such as concrete or brick will be crushed and left stockpiled on site.
The site has been identified for housing.