A deal to create a new supermarket in Gateshead will bring 250 new jobs to the area.
Gateshead Council and developers Morbaine have reached an agreement with Morrisons to build a new store in Birtley town centre.
A final consultation will take place with people in the area, with a formal planning application expected early in the New Year.
Birtley has been without a major supermarket since 2009.
Leader of Gateshead Council Mick Henry, said: "We've been working hard to create the right opportunity for a major retailer to move into the town centre, so now we've succeeded I hope this will be the catalyst for more development in the area."
The new store is set to be built on the site of the former Somerfield store which closed in 2009 and land previously used as a Gateshead Council depot.