Five light industrial units are set to be built on Guernsey's Lowlands Estate by the end of the summer of 2011.
The Channel Islands Co-operative Society said the development was in response to the lack of workshop space since the closure of Leale's Yard.
Peter Roffey, the society's president, said: "We've had planning permission for some time, we're just finishing off the building control permits.
"We're planning to start work on it next month."
The units will be built on land on the estate owned by the Co-op.
The closure of Leale's Yard in 2009 left a number of small firms without workspace and complaining they had nowhere to go.
The Channel Islands Co-operative Society had wanted to relocate some of those tenants in industrial units in the redevelopment of Leale's Yard, but the States' planners decided the area should be for retail and residential units only.