"System" storage on macOS Sierra is 470GB!
Download OmniDiskSweeper and analyze your hard drive.


  OmniDiskSweeper will show you the files on your drive, in descending
  order by size, and letting you decide what to do with them. Delete
  away, but exercise caution.
  
  


OmniDiskSweeper will show detail of space usage: 
Select System and start cleaning.

It could be the Time Machine backup file that takes almost all the free space.