Ocado is planning to build a new 40,000 sq ft distribution hub in Bristol.
The online grocer has agreed to buy a 2.4-acre site in Avonmouth, Bristol, through which it claimed it would be able to expand its service to an additional million homes and create up to 170 new jobs.
Construction on the new shed will begin shortly, with the site set to open in March 2011.
Ocado will be able to process 10,000 orders a week through the new site, it said, with 60 vans delivering to the Cardiff, Bristol, Bath, Taunton and Cheltenham areas.
Earlier this month the company unveiled £210m plans for a second customer fulfilment centre near Tamworth in the Midlands, complementing its existing base in Hatfield.
Ocado sets out plans for £210m Warwickshire depot (12 October 2010)
Second Opinion: Is Ocado a sound investment? (19 June 2010)
Ocado to use flotation funds for new depots (13 February 2010)