The planning application, submitted to Wakefield Council by West Yorkshire Property Developments Ltd, will see the former Bondi Beach Bar, on Albion Street, converted into 20 apartments and four commercial units.
It was approved by the council's planning department earlier this month, on the condition that development begins within three years.
The building was last used as a nightclub in 2011.
The flats will include seven studio apartments, between 35m² and 38m², as well as 13 one bedroom apartments, each between 43m² and 52m².
The exterior of the building will remain largely unchanged, though a number of one- and two-storey extensions will be demolished.
Some new entrances will be added on the ground floor, and the application also includes details on the alternation of windows, including the installation of rooflights to provide "adequate natural light and ventilation to the apartments located within the roofspace".
There will be limited parking spaces, with only one disabled bay planned, but the application notes that the flats will be within 200m of Castleford Bus Station and railway station.
Cycle parking will be available inside the building.