The historic hospital has stood on the site since 1854, but has been derelict for almost 10 years.
Since its closure, Clayton Hospital has been subject to vandalism, decay and even unauthorised ghost hunts.
But all that is set to change, as redevelopment gets underway at the site this week.
The Wakefield Grammar School Foundation, whose schools neighbour the abandoned hospital site, has officially begun work to demolish large parts of the building.
Councillors gave the go-ahead for the redevelopment in April of this year, to create new sports facilities for students at Queen Elizabeth Grammar School and Wakefield Girls' High School.
However, the hospital's pavilion building will be restored and refurbished, and form part of the new site.
Speaking at the meeting earlier this year, Helen Massey, a governor at the Wakefield Grammar Schools Foundation, said: "The Foundation has been providing education in Wakefield for 430 years. We will strive to ensure that this exciting project is a beacon of excellence of which Wakefield will be proud.
"Time, care and investment from all parties will ensure the proposals will be sympathetic to its surroundings and will not only benefit the schools, but the wider community."
"Clayton Hospital sits at a key entry point to thee city. By approving this application, the economic benefits and positive message this will send out will be that Wakefield is a forward-thinking city."
Ms Massey also said that the proposals would create jobs and "reverse the decay" of a much-loved building.