The practice, which is based in Berlin and is headed by CABE commissioner Louisa Hutton, has secured planning permission for a new 'landmark' building for the University of Sheffield on the empty western corner of the Jessop Hospital site.
Once built, the competition-winning scheme will provide new facilities for the University's departments of English, law and history.
Sauerbruch Hutton has become established as one of the biggest names in German architecture, but has had trouble picking up successful commissions in the UK.
Meanwhile, Sheffield City Council has also approved the revamp of the existing Grade-II listed Victorian hospital, to be carried out by Carey Jones. The university's department of music is expected to move into these refurbished buildings.
Tony Crook, pro-vice chancellor at the University of Sheffield, said: 'We are delighted that we are able to move forward with the second phase of our development of this site.
'This next phase will ensure that we can bring the historic Victorian wing of the old Jessop Hospital back into daily use. We know that the building is a much-loved landmark and part of the city's history, therefore renovating and protecting this heritage for future generations is very important to us.'
He added: 'What's more, we now have the chance to provide our students with outstanding facilities in iconic buildings, both historic and newly built, and are able to transform and regenerate this key site for everyone in the city.'
Work is expected to start on site early next year.