The proposed supermarket development, mooted by William Street IGA owner Judy Fellows, would be built behind the existing Andy's Bakery site in Meander Valley Road.

More than half of the meeting's public gallery comprised IGA workers as Ms Fellows and her supporters watched on during discussions.

Council development services director Martin Gill said the application had been made under provisions of the council's new interim planning scheme.

"This has been a very thorough assessment and we've worked with the applicant to resolve a number of issues," Mr Gill said.

Councillor Bob Richardson abstained from the vote.

Cr Richardson said although he gained state government clearance against holding pecuniary interest, he would abstain to avoid any potential implications as a William Street business owner.

Newly inducted Deputy Mayor Deborah White raised questions about a proposed animated sign for the supermarket front in light of the town's heritage values.

"My only concern is that an animated sign is clearly not with heritage streetscape," Cr White said.

She moved that the development be approved but without allowance for an animated sign.

Although the motion was seconded by Cr Ian Howard, it failed to gain any backers.

Cr Rodney Synfield raised the development's proximity to rail lines; 33 metres instead of an outlined 50-metre distance.

However, council senior town planner Jo Oliver advised that TasRail was satisfied with the setback of the development as it would not include any residential structures.

Cr Pat Frost moved approval for the plan, seconded by Cr Ian Mackenzie.

"This application is good for town employment," Cr Frost said.

"It will not only generate retail but also construction. There has been no other major development in Westbury since Tas Alkaloids happened.

"I'd like to congratulate the applicant for having the foresight to do this."