A large, new Iceland supermarket is set to occupy part of the former Toys R Us store in Bourges Boulevard.
The retailer has agreed a deal to move into the vacant premises providing planning permission is granted.
Toys R Us went into administration in February 2018, and in April this year a huge blaze ravaged the site.
Shortly before the fire Home Bargains had submitted its own plans for a discount shop at the premises, and now a deal has been agreed for Iceland to move in as well.
But instead of being a conventional Iceland store like the ones in Rivergate, Lincoln Road (Millfield) or the Bretton Centre, it would be a larger Food Warehouse which the retailer states offers customers “bigger choice in food and homeware”.
Iceland Food Warehouses have only been operating since 2014, although more than 100 are now open including one at Ortongate Shopping Centre.
Customers are able to buy products in bulk, with the average spend more than double that of smaller stores.
Home Bargains is the trading name of TJ Morris which owns the freehold of the former Toys R Us store.
In a new planning application submitted to Peterborough City Council it states: “Iceland is looking to strengthen their existing representation in Peterborough.
“Contracts have now been exchanged between Iceland and TJM, and the completion of the Agreement for Lease is on a subject to planning basis.”
The new store would create 20 to 25 permanent jobs, the application states.
The Peterborough Telegraph revealed the plans for the city’s first Home Bargains store in May.
However, TJ Morris declined to comment when asked when it would open and how many jobs would be created.
The fire at Toys R Us started late on Monday, April 22 when police were forced to close the road for several hours while firefighters from 12 different stations tackled the flames.
No-one was hut in the incident, but the flames and smoke could be seen for miles across the city.
A Cambridgeshire Fire and Rescue spokesperson said there was no evidence the blaze had been started deliberately.