One of Countdown's larger supermarkets and some additional shops - creating more than 100 jobs - will be built on the prime Bureta Park Motor Inn site in Tauranga.
Progressive Enterprises has confirmed it wanted to establish its latest and newest 4000sq m Countdown on the site fronting busy Ngatai Rd (pictured).
"We see this as an exciting opportunity," said a Progressive Enterprises spokesman.
"Our nearest stores are 3km away (in Cameron Rd and at Bethlehem Town Centre), and when you look at the population in the Bureta area we feel there is a need for local residents to have convenient access to a full-sized supermarket."
The $20 million development - which could take place next year - will involve a "new generation" Countdown supermarket that has 30 per cent of its retail floor space dedicated to fresh foods, a wider range of products with up to 30,000 items, and energy-efficient and sustainable heating and refrigeration systems.
The country's largest Countdown is in Tauranga's Fraser Cove Shopping Centre, 5000sq m in size and run by 120 full and part-time staff. The Progressive Enterprises spokesman said "we are keen to open the (Bureta) supermarket as soon as we can".
The Countdown, carpark and a small number of shops will take up half of the 3.2ha site, and the company was considering subdividing the remainder of the land into residential lots.
"There's still a lot of detail to work through and we will be presenting our plans to the local community and council within the coming months," he said.
General Distributors, the property owning division of Woolworths and Progressive Enterprises, bought the Bureta Park site from The Brian Perry Charitable Trust before Christmas.
Parent company, Australia-based Woolworths, made a confidential application on "sensitive land" at 44 and 50 Bureta Rd to the Overseas Investment Office. The office granted a consent on November 15, saying the purchase will enable the applicant to implement its business investment plans and to increase its presence in the Otumoetai area.
Progressive Enterprises is leading the development, and it means the ageing hotel, bars and function rooms will be demolished.
Tenants running the bar and the accommodation side of the motor inn have received letters from the new owner but they are still awaiting final details of the new plan.
Their leases run through to 2014 but they have a clause giving six month's notice to end the tenancy. The Mill Liquorsave store is also on the site.
Hamilton-based Perry Developments had council backing to develop 86 residential units, nine shops and a 1100sq m restaurant/bar - worth $60 million - on the Bureta Park site and had applied for a portion of the land to be re-zoned commercial, from Suburban Residential A.
The city plan hearings committee declined that application and an appeal was being mediated through the Environment Court.
Simon Perry, chairman of Brian Perry Charitable Trust, said "we had a residentially focused development in mind, but with the market being what it is it was a long term and capital intensive project".
"An offer to buy came in and we took the opportunity to sell. I guess the negotiation took three months," Mr Perry said.
Local residents opposed the Perry development, mainly because of the 11.5m height of the residential units which would block some views.
A Bureta resident of 60 years, Betty Disney, said: "To be honest, I'd prefer a supermarket down there.
"If that's what has to come along, then so be it ... it's better than having a big eyesore of a concrete jungle."
Another resident, who spoke on condition they were not named, said if the supermarket was going to be single storeyed that was much better than the Perry development. He said there was already a collection area for a supermarket.
"You won't really get an increase in traffic because there's a static population, and the difference will be that they will stop to shop - it will help the convenience stores nearby as well as the supermarket."
The closest supermarket for residents in Pillans Point, Bureta and the harbour side of Otumoetai are Pak'n Save in Cameron Rd and Brookfield New World, owned by Foodstuffs and a fierce rival to Progressive Enterprises.
Progressive has now refurbished and re-branded all its supermarkets to the "new generation" Countdown, except the one in Bayfair that remains Woolworths because there is a Countdown in the shopping centre.
The Foodtown supermarket in Cameron Rd was closed in May last year.
Progressive is seeking to increase market share and it now has 160 supermarkets, employing 18,000 people.