One of the main unresolved issues in large-eddy simulation(LES) of wall-bounded turbulent flows is the requirement of high spatial resolution in the near-wall region, especially in the spanwise direction. Such high resolution required in the near-wall region is generally used throughout the computational domain, making simulations of high Reynolds number, complex-geometry flows prohibitive. A grid-embedding strategy using a nonconforming spectral domain-decomposition method is proposed to address this limitation. This method provides an efficient way of clustering grid points in the near-wall region with spectral accuracy. LES of transitional and turbulent channel flow has been performed to evaluate the proposed grid-embedding technique. The computational domain is divided into three subdomains to resolve the near-wall regions in the spanwise direction. Spectral patching collocation methods are used for the grid-embedding and appropriate conditions are suggested for the interface matching. Results of LES using the grid-embedding strategy are promising compared to LES of global spectral method and direct numerical simulation. Overall, the results show that the spectral domain-decomposition grid-embedding technique provides an efficient method for resolving the near-wall region in LES of complex flows of engineering interest, allowing significant savings in the computational CPU and memory.