A planning application has been submitted to the City of Lincoln Council for a new Lidl superstore to be built on the former Boultham Dairy site.
Under the plans, Lidl would relocate to the site from its existing St Marks store.
The relocation would create 15 to 20 more jobs, increase availability and product range and also create a better shopping environment for customers.
The multi-million pound plan would also see a 1,849sqm food store built, with a 71-space car park.
Property agent Banks Long & Co is leading the scheme on behalf of Lincolnshire Co-operative, which owns the Dixon Street site.
The Society plans to sell the site if planning permission is obtained. The Dixon Street site has been inactive since the Dairy Farmers of Britain closure in 2009.
Spokesman for Lincolnshire Co-op Emma Snedden said: “Currently this land stands empty and our agent Banks Long & Co have been working on plans for the sale of the site which would bring it back into economic use.”
Peter Banks, partner at Banks Long & Co, said: “The principal element of this application is a Lidl supermarket which will be able to serve residential areas to the north and south along Boultham Park Road and is within walking distance of housing along the lower High Street.
“It is proposed that about half of the site, adjoining residential properties in Marjorie Avenue, will be developed for residential purposes with a separate entrance from Boultham Park Road.
“The Islamic Association has identified this as a potentially suitable replacement site following the refusal of planning permission for a new mosque on their nearby site at Church Drive.”