Up to 25 jobs will be created when a major supermarket chain opens its second store in the city.
Aldi has been granted planning permission to build a store in Newark Road on the site of Ready Rent a Car.
Both full and part-time positions will be created in store and an estimated 100 employment opportunities will arise during the construction phase.
Simon Beardsley, chief executive at the Lincolnshire Chamber of Commerce, is delighted with the development.
"It is good to hear that new jobs and construction opportunities are coming to Lincoln and it is encouraging to see a national organisation, such as Aldi, showing confidence in Lincolnshire's local economy," he said.
"Building a store, appointing a construction firm, setting up supply chains and recruiting new members of staff shows that the supermarket has long-term plans to stay in Lincoln,'' he added.
"Some business reports talk of a triple-dip recession following the latest disappointing GDP figures but it is important to put this in perspective.
"The figures for the third quarter of 2012 were inflated by ticket sales for the Olympics.
"Every effort must be made to minimise any harmful effect these figures may have on businesses.
"We know from our own research that confidence among businesses in Lincolnshire is still relatively strong and this announcement about Aldi proves that businesses are determined to do what they can to drive growth."
The German discount supermarket chain has more than 8,000 stores worldwide, with more than 400 in the UK.
The Newark Road store will be Aldi's second Lincoln store, with the other being in Wragby Road.
Building work is due to start later this year.
An Aldi spokesperson said: "We currently own the site at Newark Road and have been granted planning permission for a new store.
"Although we haven't yet set an opening date we are looking forward to bringing local shoppers brand-like quality products at everyday low prices."
The store will have a retail space of 990 square metres and 78 parking spaces including four disabled bays and eight parent and child spaces.
It will open from 8am until 10pm Monday to Saturday and 10am to 5pm on Sundays and Bank Holidays.
And it could boost other businesses in the area.
Neil Sutcliffe, owner of Maggies fish and chip shop, said: "A supermarket like Aldi will bring a different type of person into the vicinity and I will hopefully pick up some custom off that.
"People will go shopping, see the shop over the road and come and get some food.
"We usually see an increase in trade during construction too."