Nicholson was born in London to Sir Charles Nicholson, 1st Baronet, and his wife, Sarah Elizabeth Nicholson (née Keightley). His elder brother was architect Sir Charles Nicholson; his younger brother was the stained-glass artist Archibald Keightley Nicholson.
He was educated at New College, Oxford and the Royal College of Music. At this last-named institution, he studied the organ. He then served as organist at Barnet Parish Church (1897–1903), Carlisle Cathedral (1904), Lower Chapel, Eton College (1904–1908), Manchester Cathedral (1908–1919), and Westminster Abbey (1919–1928). Along with maintaining his organist posts, he edited the Hymns Ancient and Modern supplement that was published in 1916; he did not live to see the 1950 revised edition.
One of Nicholson's most successful compositions for parish choirs was his Communion Service in G, which was widely sung, especially in Anglo-Catholic churches, until recent times. He was warden of St Nicholas College, Chislehurst (1928–1939).
In addition to having edited Hymns Ancient and Modern, still the standard hymn book in many Anglican churches today, Nicholson wrote several hymn tunes. Of these, the most famous are Crucifer for the popular processional hymn Lift High the Cross and Totteridge. In 1928 he received the Lambeth DMus, and a decade later he was knighted for his services to Church music. He died at Ashford, Kent at the age of 72, and was buried at Westminster Abbey.
Books on Church Music
- Church Music (1920) London: Faith Press
- Boy's Choirs (1922) Glasgow
- Church Music A Practical Handbook (1927) London: Faith Press
- In Quires and Places where they sing (1932) London: Bell
- Peter: Adventures of a chorister 1137-1937 (1944) London: SPCK (fiction)
- Practical Methods of Choir Training (1947) London: SPCK (now RSCM)
- The Elements of Extemporisation (n.d.) Croydon: RSCM
- British Songs for British Boys (1903 with several later reprints). A collection of one hundred and eight national songs. Macmillan and Company, London .
- An Ode on the Birth of our Saviour
- Cleanse us, O Lord
- God be in my head
- Let us with a gladsome mind
- Love divine, all loves excelling
- My song is love unknown
- Teach us, good Lord, to serve Thee (boys' voices)
- The Saviour of the World
- Evening Service in D-flat major
- Evening Service on Parisian Tones
- Communion Service in G major
- Jubilate in F major (boys' voices)
- BOW BRICKHILL
- HOSANNA IN EXCELSIS
- The Boy Bishop: an Opera for Boys (1926)
- Free scores by Sydney Hugo Nicholson at the International Music Score Library Project (IMSLP)
- Nicholsons biography at The Cyber Hymnal 
- Godfrey, W. H. Nicholson, Charles Archibald, second baronet, Oxford Dictionary of National Biography, Oxford University Press, 2004, 23 September 2004, retrieved 10 May 2020.
- The American organist - Volume 22, p. 162
- The Musical Herald - Issues 658-669, p. 40. John Spencer Curwen - 1903
- In Tuneful Accord: The Church Musicians. Trevor Beeson. Hymns Ancient and Modern Ltd, 1 November 2009.
- Armstrong Siddeley Motors: The Cars, the Company and the People in Definitive Detail. Bill Smith. Veloce Publishing Ltd, 2006.
- Abbey Commemorations, Westminster Abbey website, accessed 18 April 2023
- "Sydney H. Nicholson | Hymnary.org". hymnary.org. Retrieved 18 February 2022.