J Sainsbury's has been chosen by Stockport council to develop a mixed-use scheme on the Knightsbridge site in Great Portwood Street.
The seven-acre site is part of the council's £500m Future Stockport regeneration plan for the town centre, led mainly by Lend Lease.
Sainsbury's will relocate its store from Warren Street to Knightsbridge as part of the development, making way for the redevelopment of its current site.
Cllr Sue Derbyshire, executive member for regeneration, said: "The comprehensive redevelopment of Knightsbridge is a major part of our Future Stockport masterplan. Since we made the decision to market the proposal, the level of interest has been exceptional.
"Having studied the short-listed schemes, we have agreed that J Sainsbury's proposal represents excellent value with exciting possibilities for the redevelopment of Knightsbridge. It also opens up discussions regarding the redevelopment of their existing store on Warren Street, which is particularly interesting."
More details on the scheme itself will be available later in 2008. The decision is subject to call-in by the scrutiny committee.
Stockport is advised by Cushman & Wakefield.