Lidl is planning to set up a distribution centre near Exeter Airport, with the creation of up to 450 jobs.
The site was acquired from Sainsbury's which said in 2013 that there was 'no immediate requirement for a depot' following a review, despite planning permission being granted in 2011.
Simon Hall, BBC South West home affairs correspondent said the deal is a graphic illustration of the changing times in the supermarket sector.
He said, 'Just a few years ago, Sainsbury's was such a dominant force that the idea of them selling a flagship site for a new supply depot to a newcomer like Lidl would have been unthinkable.
'But this shows just how successful the discounters have been in winning market share and turning around the UK's long-established supermarket hierarchy.'