Developer Arcadian Estates' application to demolish the East Street shopping centre to create a 5,400 square metres Morrisons supermarket has been granted full planning permission.
The £30 million redevelopment is also intended to open up the old town area of the city by re-establishing a pedestrian link between St Mary’s and the city centre, the company said.
Two levels of parking above the store would provide around 280 parking spaces for shoppers and visitors, according to a statement.
Southampton City Council leader Richard Williams welcomed the promise of 400 new jobs for the city and said the project is "a key part of a bigger plan to reinvigorate this important part of the city".
David Lewis, director of Centros, which is managing the development for Arcadian, said the council’s approval meant the plan to open the new store by the end of 2014 remained on track with work intended to start on site next summer.