The Co-operative Food is to open a convenience store at the corner of Lower Marsh and Westminster Bridge Road.
The new Waterloo food store, which is due to open in summer 2014, will occupy the ground floor of the former Dover Castle pub.
"Subject to the completion of necessary building work we expect the new store to open in summer 2014.
"Everyone at The Co-operative is very proud of our record of operating at the heart of communities across the UK and we are delighted we are going to be able to bring a new store to the area.
"We look forward to providing our customers with a pleasant and convenient shopping experience with excellent customer service."
The new shop will be the fifth Co-operative Food store in SE1. The chain acquired four local Costcutter convenience stores from Sunstar Group last year.