An expansion plan for the Kmart complex has been welcomed by the City of Launceston council.
A development application to expand the site into the south-western car park was approved unanimously at Thursday's meeting.
The number of car parks would be reduced, but the application said there was still plenty of car parks in the main area.
As part of the $4 million development, 11 single tenancies would be created on the ground floor in the first stage.
The application was approved with an amendment to include a request for a car park management plan.
Councillors said it was good to see the site's owners have enough confidence in the city for to put forward the proposal.
Councillor Alan Harris said he hoped the CBD retailers would get together and meet the challenge head on.
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