The Tesco store on Murraygate will lay empty until late 2020, at which point Sports Direct and USC shops move into the site.
In an email to Dundee City Council (DCC) leader John Alexander, a spokesman for Sports Direct confirmed the plans.
The company remained tight lipped in the immediate aftermath of the news that the busy Tesco supermarket will close in November, potentially costing up to 78 people their jobs.
Sports Direct own the building and a disagreement arose over the lease with Tesco. A spokesman for the supermarket chain expressed the firm’s disappointment in the wake of the news.
Mr Alexander described the situation as leaving a “very bad taste in the mouth”.
He said: “In the immediate aftermath, I contacted Sports Direct to ask why this situation was allowed to arise, why lengthy notice wasn’t given, what their plans were and why they didn’t notify key organisations such as DCC, who could have put support in place earlier.”
In a response to those queries, a Sports Direct spokesman said the company acquired the unit in November 2017 with the aim of opening “new, elevated Sport Direct and USC stores in the town”.
The spokesman added: “Over the last 12 months, we have been in discussion with Tesco over the future of the store.
“Refurbishment works will begin in December 2019 with the new store set to open in winter 2020. This is a major part of Sports Direct’s brand elevation strategy which will see a huge investment in a number of new stores, while upgrading and improving existing sites across the UK.”
Mr Alexander added: “Now I find myself in a position of questioning both Sports Direct and Tesco on what conversations did and did not take place and when issues were known.
“Of course, it’s good news that it will have a purpose going forward and will ultimately employ locals, but it doesn’t address the issue.
“It’s all well and good for two international, billion pound companies to say it was all the other’s fault, but the reality is 70 families will suffer the consequences.”
A Sports Direct spokeswoman would not be drawn on whether the development would have an impact on the Overgate store.
A Tesco spokeswoman repeated the firm’s disappointment at the move and insisted a short extension on the lease was requested, but knocked back by Sports Direct.