Liverpool City Council has officially made a Compulsory Purchase Order for the £150m regeneration of the Great Homer Street project, north of the city.
The CPO will enable the council and its development partner St Modwen to move ahead with the acquisition of land needed to deliver the community-led regeneration project.
Michelle Taylor, regional director at St Modwen, said: "There is still a great deal of work to be done but, with the CPO process officially underway and providing there are no major objections received, the scheme could start on site as early as 2012.
"Residents of Skirving Street told us that they wanted to stay in their homes and we have listened. The plans have been adapted and these properties will not be affected by the CPO.
The scheme, known as Project Jennifer, will transform a 45-acre site in north Liverpool, creating retail and employment floor space, new homes, improved public spaces and new community and leisure facilities.
A 110,000 sq ft Sainsbury's supermarket, situated between Great Homer Street and Scotland Road, is being built as part of the plans, which the council claims is the largest food store to be built in Liverpool to date and will act as a catalyst for the wider redevelopment of north Liverpool.
Liverpool City Council approved a CPO on the project in 2008 but the legal procedure was delayed following a dispute between St Modwen and Tesco over a decision by a government planning officer to reject a standalone 80,000 sq ft Tesco store in Great Homer Street in 2009.
The supermarket giant, which was originally approached by the Project Jennifer team to anchor the scheme before Sainsbury's, lost its legal challenge at Manchester High Court last summer.
Liverpool City Council and St Modwen said the decision on Tuesday night signals the start of a statutory period during which any objections to the CPO will be heard. If challenges are lodged, the CPO would be referred to a public enquiry which would likely to be held later this year.
St Modwen has begun negotiations with land owners in accordance with CPO regulations and several properties have already been purchased.
Once completed, Project Jennifer will deliver a new food store, 80,000 sq ft of additional retail units, 80,000 sq ft of light industrial units, 480 new homes, and 40,000 sq ft of community facilities, including a new market and community health centre.