They plan to build a new 3,000 sq ft store on the ground floor of La Colomberie and Grenville Street, and the upper floors of the building will be turned into 19 social housing flats.
Last month, the Co-op announced that 68 Jersey jobs were at risk over plans to close their warehouse operation and TotalSport. At the time, chief executive Colin Macleod said that the cost-saving measures would reduce the pressure to put up prices to customers.
He said that the Colomberie plans was part of a series of developments planned by the society.
He said: “We are delighted to announce that we will be transforming the ground floor of this tired office building into a modern and convenient shopping experience for our members who live, commute through or work in the south east of St Helier.
“Colomberie Locale will be an exciting addition to our store portfolio and will take its place alongside the new Grouville Locale in Jersey, the new En Route at the GT Cars site in Guernsey, the extended store at Maufant and the planned redevelopment of Charing Cross.
“These developments will deliver more choice and convenience for our members and will assist with the creation of new jobs in both islands.”