The 5351sq m store will be one of Kmart's new generation stores and will include central checkouts, Jeff Broomfield , Kmart's national property manager, said.
"It's a perfect format for us."
There will also be wider aisles for pram and wheelchair access and bold graphics to help with navigation.
The store will be offering the same products as the current store in Hastings.
It is expected to bring 80 new jobs to the region, and Broomfield said there were plenty of opportunities for advancement.
North zone manager at Kmart Regan Wallis started out at the Hastings store when he was 15, and south zone manager Emma Hedin also started at age 15 at a store in Melbourne.
As well as the store, there will be an additional 1000sq m food court, which will be developed following the opening of the store.
Kmart's country manager New Zealand, Jason Picard, said the development of the Kmart Napier store is part of its commitment to making affordable on trend products more accessible to New Zealand customers.
"We look forward to commencing the development of our new Napier site and opening in late 2020," Picard said.
"I along with the entire Kmart team can't wait to meet the community and welcome them through our doors – the store will provide locals with an enjoyable shopping experience and greater access to our affordable on-trend products."