Chiefs at the city council have welcomed the news about construction of the store on Raglan Street – expected to start 14 October.
The new supermarket, petrol station, 700-space car park, pedestrian links across the ring road and the planting of new trees and shrubbery are expected to be finished in summer 2014.
The news follows Wolverhampton City Council's own announcement this week that it is to invest £10.6m in creating new retail and grade A office space at the Interchange.
Further developments in the city centre include the University of Wolverhampton embarking on a multimillion-pound programme of investment in consolidating its campus. The council is also about to start on site with the first phase of a £5m transport and movement improvement programme.
Councillor Peter Bilson, cabinet member for economic regeneration and prosperity, said: "This is excellent news and a major boost for our overall plans for the city centre.
"The new store represents a significant investment by Sainsbury's and will see the creation of new jobs. It will also be a shot in the arm for the city centre economy."