The former Honey Club on West Parade is to be torn down in preparation for a 60 bed hotel.
A licence agreement has been signed between Chesham Estates and Denbighshire Council to demolish the site with preparation work starting in January.
Construction of the hotel could start in September.
Ann Jones, Vale of Clwyd AM, said: “This is great news, not only does it mean the Honey Club will be demolished, following the green light given to the council by the Welsh Government, but also that a brand new 60 bed hotel will replace it.
“It’s so important for employment and the success of local businesses that we do everything to attract tourists and visitors to our town.
“I will be in contact with Denbighshire Council and the contractors throughout the development to ensure that disruption, for local businesses, residents and tourists is kept to a minimum.”
Contractors will use part of the Crescent Road car park as a site compound and this will be taken out of use for contract parking for the duration of the demolition contract.
Permit holders will be offered alternative parking arrangements.
Road and footpath closures will be limited to minor disruption on West Parade and a control system will be put in place.
The eastern end of Crescent Road will remain closed for the duration of the demolition project or until it is safe to reopen and some minor disruption will occur when the scaffold is extended in height and Water Street tunnel will remain in place.
A spokesman for Denbighshire said: “Denbighshire Council is close to signing the development agreement with Chesham Estates, who remain committed to the project, to enable development of the site for the hotel, and
“The anticipated start date for construction to start is September or October, subject to planning consent.”