A masterplan for the valley's development over the next ten to 15 years drawn up by consultants Civic Regeneration is due to be put before Sheffield City Council's cabinet next week.
The document proposes creating a new urban quarter in an industrial area close to the River Don. This would see housing introduced into the area along with leisure facilities and an education and training cluster.
The development of the quarter would be used as an opportunity to open up the riverside for public enjoyment.
The consultants propose 110,000 sq m of business floorspace creating up to 3,500 jobs on an industrial estate close to Sheffield Wednesday Football Club's Hillsborough ground. They also suggest the expansion of Sheffield Ski Village, as a catalyst for investment in the Parkwood Springs area.
Civic Regeneration was commissioned by Yorkshire Forward to identify proposals that could contribute to the regeneration of the valley. To attract developers to the valley, the city council will make bids for regeneration funding for suitable schemes. The council also aims to improve transport in the area and help firms wishing to relocate.
Neil Jenkinson, head of South Yorkshire affairs at Yorkshire Forward, said the masterplan "will allow the Upper Don Valley area of Sheffield to be developed by making the best use of the existing assets and will provide an infrastructure that will be a basis for future economic development".