The Bendigo council last night approved the development plan overlay to expand the Marketplace shopping centre towards Garsed Street and incorporate an underground car park.

The development plan is a preliminary to approval for further planning permits, but developers hope the project will be completed by December, 2008The added 7385-square metres of floor space will incorporate 41 specialty shops and an expanded food court.

Marketplace management have said the project will create 520 new long-term jobs as well as 400 construction jobs, reinforcing retail as the largest employer in Bendigo.

The complex will also add 292 car spaces, bringing the total car spaces for the complex to 1272.

Preliminary plans submitted to council by Melbourne architects Buchan, Laird and Bawden show a major entrance to the underground car park at the top of Edward Street, replacing the existing roundabout entrance.

Cr Wayne Gregson described it as a great leap forward for Bendigo retail and the present plans by emphasising on developing towards Mitchell and Garsed streets, and not to the rear of the site, showed how the Marketplace was becoming incorporated into the CBD.

"It is a vote of confidence in the future of Bendigo by developers and a vindication of our land strategy and our CBD planning process," Cr Gregson said.

"It does fit into our strategy and it does consolidate Bendigo as the retail hub of Northern Victoria," Cr Rod Fyffe said.

But some councillors were concerned that the plans did not sufficiently connect Mitchell Street and were developing one area of Bendigo while ignoring development and infrastructure needed in other areas.

Cr Kevin Gibbins said ignoring other areas' needs could push "a massive wedge" between retail areas, leading to future decline in the CBD.

Cr Greg Williams said as the centre grew, a shortage of parking would exacerbate the parking crisis in other parts of the CBD.

But Bendigo Traders Association vice-president Graeme Baker said while the Marketplace did represent competition to CBD traders, it was one they were ready to meet.

"Competition is simply a fact of life in retailing," Mr Baker said.

"The BTA has taken up the challenge, we have the promotional levy to help promote the CBD and a viable plan to make the CBD an attractive place to shop."

Mr Baker said the expansion should not necessarily be seen as all negative by traders and applauded the efforts to create better through-ways to connect transit between the two areas.

"Put the two together and you have a real drawcard for Bendigo; people who travel to Bendigo will visit Marketplace, the CBD or both."

City of Greater Bendigo director of Planning Prue Mansfield said the application complied with the council's CBD structure plan both in terms of its proposed growth and its strategic objective to incorporate the Marketplace into the CBD.

"That is why we have done a great deal of work with Marketplace to improve the pedestrian links to the CBD," she said.

"It's about making all those connections clearer and more transparent."

Ms Mansfield said the plans showed an enhanced entry way at Edward Street to join into a pedestrian flow into the CBD, while there would be further negotiations on the avenue between the Discovery Centre and the Railway Station and other pedestrian and cycle links to the CBD.

Bendigo Marketplace centre manager Debbie Plunkett said they hoped to incorporate a ramp rising up from the Mitchell Street side of Marketplace with shops on its southern side up to the Discovery Centre to replace the awkward ramp and steps.

Objections to the proposal include Crystal Ice having argued that the development will increase traffic along Garsed Street, but the council has argued that the application has submitted sufficient evidence to meet car parking and traffic requirements for a commercial zone.