Work at the proposed retail site on Showgrounds Hill could get under way as early as next summer.
Countdown has been confirmed as the anchor tenant for the Calder Stewart-owned site, which was consented in 2011.
Timaru District Council regulatory services manager Chris English confirmed a resource consent had been received from Countdown to operate a supermarket on the Timaru site but it was "still in the process stage".
Calder Stewart managing director Alan Stewart said there had been a lot of "positive discussion" with Countdown.
"We're still going through the early stage of preparation, including working out the potential costs and logistics for the store.
"We're on the right track and, all things going to plan, we should start the first stage of development later this year," Stewart said.
Countdown's property general manager Adrian Walker said it was pleased to be working with Calder Stewart, as "suitable sites for supermarkets were hard to come by".
"We're committed to building a store that is part of a vibrant retail environment and will really complement the community.
"Timaru is an area of growth, and we see a real value in supporting this and providing a great offer to the community," he said.
It would be the third Countdown supermarket in Timaru once completed. Walker said it was too early to confirm the number of people the new store would employ, as it was still going through the consent process.
"However we can confirm our two existing supermarkets will continue to operate as normal."
Up to 17,000 square metres has been earmarked for the Showgrounds Hill site's first stage.
An early proposal suggested the new supermarket could cover about 3800sqm.
The site is one of two potential large retail developments in the Timaru district. Last year, South Canterbury-based consortium Hilton Nominees announced its intention to turn a 3-hectare site on Hilton Highway into a big box retail development.
- The Timaru Herald