Watkin Jones has begun work on the new £18m Tesco store in Farnworth, Bolton.
The 70,000 sq ft development on Longcauseway is set to deliver 240 new jobs to the area when it opens in time for Christmas 2011.
Cllr Cliff Morris, leader of Bolton Council, said: "This major investment is good for the community and will provide a significant boost for the local economy.
"It means further investment into Farnworth in addition to the other developments that have happened and are planned for the area."
Matthew Magee, Tesco regional corporate affairs manager, added: "We're delighted to begin work on the new store in Farnworth. This will be one of our regeneration partnership stores, which means we employ many long-term unemployed people via a job guarantee scheme.
"We're very proud of the investment and job creation in this economic climate, and we're looking forward to being a member of Farnworth's community."