Big box retailer Costco will spend over $100 million on its new warehouse before the store even opens the door.

The Overseas Investment Office (OIO) has green-lit Costco's $23.2m purchase of land in Westgate, next to the existing shopping centre.

In its application Costco said it would spend over $100m on the development of the three-level mega store, due to open in 2021.

This is the first New Zealand store for the United States company.

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The OIO said the benefits of the development included the creation of new jobs to build and operate the warehouse, increased retail competition and exports of New Zealand products to other Costco stores worldwide.

123RF New Zealand's first Costco is expected to begin construction in October.

Company executives announced Costco was coming to New Zealand in June last year.

The store will offer the chain's full format including a Costco fuel station, tyre centre, food court, optometrist, hearing aid services along with groceries and homewares.

A pharmacy was also possible in the future, Costco Australia managing director Patrick Noone.

Costco has opened 11 stores in Australia since 2009, selling everything from fresh food and groceries to diamonds, and even coffins.

Its most recent store opened last week in Perth.

In Australia, Costco prices were 25 to 30 per cent cheaper than other retailers and the same was expected for New Zealand.

CHRIS SKELTON/STUFF Costco Australia and New Zealand managing director Patrick Noone announced the store in June with Auckland Council mayor Phil Goff.

The company was looking at opening stores in in Wellington and the South Island, after Auckland, Noone said in June.

Retail Property Group general manager Campbell Barbour said the expected development cost was a lot of money for one store but he believed it would appeal to New Zealanders.

"It's a big number. To put it in perspective, a very large Pak 'n Save or a Bunnings or Mitre 10, they are perhaps $30m to $40m developments. This is definitely bigger."

Costco's resource consent application with Auckland Council was currently being processed, Barbour said.

"It's our understanding is they plan to start construction in October," he said.

"At the end of the day it is one store but they are the second largest retailer in the world.

"When you have businesses of this size coming and setting up shop here, it reinforces where we are getting to, we are getting what everyone else has had for a while."

Costco would not comment.