This study proposes an iterative direct displacement based design method for a novel steel-timber hybrid structure. The hybrid structure incorporates Cross Laminated Timber (CLT) shear panels as an infill in steel moment resisting frames. The proposed design method is applied to design 3-, 6-, and 9-story hybrid buildings with three bays and CLT infilled middle bay. Nonlinear time history analysis, using twenty earthquake ground motion records, is carried out to validate the performance of the design method. The results indicate that the proposed method effectively controls the displacements due to seismic excitation of the hybrid structure.