Port Fairy-based MM Hearn Constructions will start building on the Commercial Road site in the coming months.

Daly's IGA partner Mick Daly said there were six tenders, three of which were from metropolitan areas or outside of Moyne Shire.

"We were always mindful of wanting a local company," he said.

"I think that, when you do have some control, it's a little insulting to the local community if you pull someone from outside the region.

"We would have loved someone from Koroit but the company we had in mind was tied up. We are just as pleased and excited to publicly announce that the tender has gone to MM Hearn Constructions."

Mr Daly said there was "no downside" to employing local people.

"No doubt MM Hearn Constructions will use local contractors when they need to and everyone profits from that," he said.

"Construction stays within the south-west and particularly in Moyne. There's no downside."

Developer Michael Hearn, of MM Hearn Constructions, said the redevelopment was a "fantastic local project".

"For the Daly family to award a local firm like ourselves this project is just great," he said.

"We are very honoured and we will, as always, deliver a project of substance."

The redevelopment will increase the floor space of the supermarket from 380 square metres to 2000 square metres.

It will also include 66 car spaces and two disabled parks.

Mr Daly said he expected construction at the site to begin soon and is hopeful of the new-look supermarket being up and going by this time next year.

"It's been a bit of a long haul to finally see this come to fruition," he said.

"It's just amazing for our community and particularly for our staff who have really hung in there waiting for this to finally get over the line."

Mr Daly said Koroit was advancing and the supermarket redevelopment would contribute to that.

"The growth of Koroit is really positive, new houses are popping up and that growth won't stop," he said.

"To see Koroit in such great shape is all very exciting for the town and for the shire.

"It's great to be able to work with the shire around the parking, the benefits are there for the whole town."

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