The announcement brings the Ambience project full circle.

The mixed-use development was revived at the start of 2011 when the "half-built" project was bought by Meadow Developments Pty Ltd in conjunction with Piruse Constructions, spearheaded by local builder Joe Cachia.

The building had sat idle for two years following the collapse of the Belmorgan company, which was initially behind the project.

Mr Cachia said securing Coles was a major milestone for the development.

"We've been in ongoing negotiations over the past 12 months ... it is now all systems go," Mr Cachia said.

Coles had previously agreed in 2005 to open a supermarket in the development, but by the end of 2009, KordaMentha - receivers for SPV 7 Pty Ltd, the Belmorgan company behind the project - was informed that Coles had withdrawn its support.

Mr Cachia said it was always going to be a challenge taking on a partially completed project, but he was pleased with the outcome.

"I always knew that architecturally it was a nice building, and we have had a lot of positive comments," he said.

"Structurally, there was nothing wrong with the building.

"It had became an eyesore sitting there idle for so long, but I think it has all come together very well.

"It will make a difference to Fairy Meadow ... it will be good for Fairy Meadow."

Coles will also be joined in the building by the National Australia Bank's Wollongong business banking unit, and another "undisclosed entity", which has taken up the first-level office space.

The Ambience project comprises 34 residential units, 1400 square metres of office space and 5500 square metres of retail space at ground level and a large basement car park.

Michael Croghan, the commercial leasing director at MMJ Wollongong, said 30 out of 34 residential units had been sold.

Mr Croghan said the success of the project was a "good news story" for the Illawarra, especially given the inability of the original developer to complete the project and the "challenging economic environment" of recent years.

He said it was especially pleasing as all the key parties involved were proud local entities.

Mr Croghan said it was anticipated construction would finish early to mid-2013.