The Horse and Groom’s demolition has been backed by the Goldthorpe public - with just four out of 202 respondents to a consultation saying they wanted to keep it.
It has been targeted by vandals and fallen into disrepair since its closure.
The £23.1m Towns Fund investment - approved in March - was agreed in order to boost the future of the Dearne’s communities.
It followed the submission of a Town Investment Plan, prepared by the Goldthorpe Town Board, designed to help attract jobs and economic investment to the area, improve the local street scene, local housing and develop better transport links.
The money will fund six key projects and detailed business cases for these projects are currently being prepared before the funds can be released from government.
Development of the former pub site for community use as a new town square is one of the ‘key projects’, according to the council.
Although the business case is still being prepared, the purchase and demolition of the Horse and Groom has already been funded as part of a series of early intervention projects approved under the Towns Fund so some elements of the plan could be started before the main £23.1m is released.
Derek Bramham, chairman of the Goldthorpe Town Board, said: “The building in a poor state of repair and has become an eyesore.
“It would not have been viable for the building to be reopened.
“This important site at the heart of Goldthorpe will have a much more positive future as a public square, and we look forward to more details about this exciting development in the coming months.”
As part of the demolition process, the sign from the pub and the original stone that made up part of the walls will be salvaged so that the heritage of the pub can be remembered.
A consultation was held over the summer to gain local people’s views on the future of the site.
The views gathered through this questionnaire will help shape the business case for the town square project.
Derek added: “When we talk about the huge sums of money and the promise of investment on this scale, it can sometimes feel like something way off in the distance, but it’s already happening, and the projects and benefits are only going to get bigger.
“Investment of this scale requires careful planning with spend targeted on the areas that will deliver the most benefit for the local area.
“We carried out consultation to help shape the plan, and a huge amount of work has been done to pull together proposals which both meet the criteria of the fund, and which help attract jobs and economic investment to the area, improve the local street scene, improve local housing and develop better transport links - the priorities which we identified following consultation with local people.
“However, there is still opportunity for local people to contribute their thoughts, comments and ideas, and each of the main projects will include some consultation to help further shape these projects.”