Harris and Wood Real Estate agent Danny Harris said the Verdon Street property sold for $700,000 to a development group which builds childcare centres across Australia.

Veuve Property Group project coordinator Matt Russell confirmed the company had submitted a planning permit application to the council for the seven-room child minding development, which also included a 27-space car park under the centre.

The property group's website says the proposed centre will have 122 places for children aged from six weeks to five years.

It will also include a lift from the basement car park.

The website says the land size is 2868 square metres and the planned completion date, if approved by the city council, is in the first quarter of 2020.

If the project goes ahead, a residence at 95 Verdon Street would be demolished.

Mr Harris said his real estate company sold the property in an off-the-market transaction.

"They are a Melbourne-based developer we were dealing with," Mr Harris said.

"They have constructed childcare centres Australia-wide."

Mr Harris said prominent Warrnambool businessman Don Bell had purchased the site in 1965 before the garden supply centre business began in 1970.

"It's a prominent site coming into Warrnambool," he said.

"It will be great to see it get a face lift."

Mr Harris said the garden centre had moved from the site a few years ago.

He said the sale was a boost for the city.

"It is certainly a vote of confidence in Warrnambool that these types of groups are looking to substantially invest here," he said.

The planning permit application states the centre would run five days a week on Monday to Friday from 6.30am to 6.30pm.

It said the centre would support a maximum of 23 staff on the site at any one time. The proposal, which is expected to be voted on at an upcoming council meeting, shows there will be 893 square metres of outdoor play space for children.