The high demands on wear resistant tools have led to the development of wear resistant claddings on a substrate, which can be a low alloyed steel with higher ductility than the cladding to improve the resistance of the tool against fracture. In this study, the post heat treatment of sinter-cladded X245VCrMo9-4 steel coating on X120Mn12 steel substrate was investigated, as it is expected that the substrate remained austenitic while the coating possessed a tough martensitic matrix with uniform dispersion of carbide precipitates. Samples were prepared by sintering at 1250 °C in a vacuum furnace under a nitrogen atmosphere at 80 kPa and a heating rate of 10 K/min, and was allowed to cool in the furnace after a dwell of 30 min at sintering temperature. These samples were subjected to heat treatment by austenitisation, oil quenching and tempering. The effect of heat treatment procedures deployed on the samples was examined using optical microscopy, scanning electron microscopy, X-ray diffraction and hardness. Experimental results were supported by computational thermodynamic calculations. The results indicated that the optimised heat treatment, through which the hardness of the steel coating is significantly enhanced while the substrate microstructure remained austenitic, is by austenitising at 950 °C, quenching and low temperature tempering at 150 °C. Quenching temperature was significant to the hardness of the steel coating, as quenching from higher temperature led to a lower hardness of the matrix when compared to quenching at lower austenitisation temperature owing to a high fraction of retained austenite.