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Solution 2: End the Steam Process in Task Manager and Run it as an Administrator

Reopen the client and the download/install should now finish without any problems!.

In the Steam window, click the Steam button again and click Exit to quit Steam completely.

Navigate to the Downloads tab and check the bottom of the screen for the Clear Download Cache Click it before clicking OK.

Click the Steam button at the menu bar at the top right part of the window and choose the Settings option from the context menu which will appear.

This method can be performed even when the installation is already running and the “Allocating disk space” message is being displayed.

An alternative is to simply search for it in the Start menu or by clicking the Search/Cortana button next to it.

Open up your Steam client by double-clicking its shortcut on the Desktop.

Follow the steps below to clear the download cache in Steam. This cache can be cleared easily from within the client so make sure you try out this simple method before moving on to the more complicated ones. The most obvious cause of this problem is that Steam got stuck trying to manage its download cache files.

Overclocking – If you are overclocking anything on your computer, make sure you stop during the installation process.

If Steam is blocked by a firewall, it’s difficult to expect the connection to go through!

Blocked by a firewall – Many users have reported they needed to add Steam as an exception inside Windows Defender Firewall to get rid of the “Allocating disk space” message.

This causes the problem at hand and we recommend changing the server in Steam settings.

Some servers may be full or they might be under maintenance.

Download server is full or not working – You can choose from which server to download Steam games.

Clearing this cache has proven to be a great way to resolve the “Allocating disk space” issue.

Download cache – The Steam has its download cache which can get stuck and block the installation of the game.