Wendouree has been named one of 12 locations where the new mega-stores will be built, with thousands of jobs expected to be created during the construction phase.

The expansion has gained the support of the state government with a planning assessment given the go ahead for the project, which will also include five new Aldi stores across the state.

While the exact location of the new hardware store in Wendouree is yet to be confirmed, a spokeswoman for the state government said it would be somewhere on Learmonth Rd.

The former Bunnings site has been ruled out by Colliers International director Andrew Lewis, with speculation it could be built at the Walsh Estate.

The Woolworths/Lowes new Home Improvement chain, which is yet to be named, will commence operation in the latter half of 2011 with approximately 30 stores planned for Victoria within the next five years.

There is no word yet on what the stores will stock, but Woolworths/Lowes Home Improvement joint venture chief executive officer Don Stallings hinted it would rival Bunnings.

"Building a new destination Home Improvement offer from scratch is a challenging business venture, especially in a retail sector with just one existing dominant player,'' he said.

"Our plans require our business to get up to speed as quickly as possible to ensure we can deliver a new and competitive offer to the consumer.''

Planning Minister Justin Madden said the government would "speed up'' the planning process to fast-track jobs.

"Aldi and Woolworths predict the new developments will bring 1030 construction jobs and 1740 new retail jobs to Victoria,'' he said.

"In addition to delivering new short and long term jobs these projects have the potential to provide further significant economic benefits and increase retail choice - which is good news for Victorian families."

Mr Madden has appointed two advisory committees to provide advice about proposals for each site.