Optical remote sensing techniques can indicate the properties of objects by observing different modalities (physical quantities) of the backscattered light at different optical wavelengths. Established examples are reflectance, fluorescence, Raman, or depolarization spectroscopy. LiDAR sensing, on the other hand, allows acquiring the geometry of objects by measuring the propagation delay of optical probing signals. Multimodal multispectral (MM) LiDAR combines these capabilities and extends conventional monochromatic LiDAR in both spectral and modal dimensions within a single instrument, thus enriching point cloud data with non-geometric information. The potentially high dimension of MM LiDAR data, however, poses significant challenges for instrumental design, data acquisition, and data processing. MM LiDAR data are structured as several or all modalities are available in each of the spectral channels. The above challenges can thus be mitigated by feature selection (FS), if the structure of the features is taken into account, i.e., if entire spectral channels or entire modalities are selected or omitted. Herein, we focus on the feature selection method for MM LiDAR and propose a multiclass group feature selection algorithm (MGSVM FS) consisting of a structural sparsity-based embedded feature selection method with an all-in-one support vector machine (SVM). It tackles jointly the challenges arising from the high dimension of the MM data and the need for a multiclass classification task while exploiting the structure of the MM data. In addition, we introduce a complete workflow for evaluating the feature selection and for decision-making. We apply the framework to selecting an optimum spectral and modal configuration for remote material classification using an experimental MM LiDAR system that provides reflectance, distance, and degree of linear polarization in 28 spectral channels of 10 nm width. For the experimental investigation, we use MM LiDAR data obtained in a controlled lab environment from thirty specimens of four material classes relevant for construction. Using all three modalities, we find a configuration with only 3 spectral channels that achieves a classification mean-F1 score of 100% within this small dataset. Similar classification performance can also be achieved with only two modalities when using more spectral channels. MGSVM FS improves the classification mean-F1 score by up to 25% as compared to random selection and outperforms two other commonly used filter and embedded feature selection methods, in this application example. The proposed group feature selection algorithm and decision-making are useful for MM LiDAR, providing a link between instrumental design, data acquisition, and data processing. However, they are also transferable to other application fields related to multiclass classification, regression, and knowledge discovery, with features structured in groups. The collected MM feature dataset, the MGSVM FS algorithm, and the evaluation pipeline are accessible online.11https://github.com/yuhan-yhyh/Dataset_Code_MGSVM-FS-MM-LiDAR.git.