The Town will sell part of the car parks on the east and west sides of the Gayton Road shopping centre to GPA for $919,000 excluding GST for the sale of the land and terminate the car park licence.
Council approved the expansion plans at a meeting earlier this year.
Mayor Simon Withers said the redevelopment of the shopping centre stalled for several years.
Get in front of tomorrow's news for FREE
Journalism for the curious Australian across politics, business, culture and opinion.
READ NOW"The community has wanted this for many years and they will not be disappointed by the new centre," he said.
"There has been a lot of community expectation. I�m glad it's finally going ahead."
Mr Withers said he anticipated the expansion would be completed by March or April next year.
GPA Pty Ltd spokesman George Atzemis said the company would start work immediately on renovating and refurbishing the shopping centre
"In May 2014, a fire extensively damaged the Boulevard Shopping Centre, resulting in the sad loss of key tenants such as the chemist, IGA, beautician and newsagent," Mr Atzemis said. �While this was a significant setback for the tenants, owners and customers, it did present an… opportunity to implement a long-held ambition of GPA to refurbish and renovate this historic shopping centre, which was originally used as the games village mess hall for the 1962 Empire Games.
"GPA is delighted that we can now commence with this refurbishment work that will result in a much improved shopping facility for the long-term benefit for the local community."
The supermarket will more than double in size and is expected to be similar to Herdsman Fresh.