Building work has begun on The Co-operative Group's new £22m food distribution depot in north Derbyshire, which will employ around 1,080 staff and create around 340 new jobs.

Construction work has started to clear the site at Castlewood in South Normanton, which is owned by Clowes Developments, ahead of laying foundations for the 477,000 sq ft facility. The project is being managed by specialist industrial development company, First Industrial.

The new state-of-the art depot, which will be located just off junction 28 of the M1, will take over the work of two smaller Co-operative food depots in the region - in nearby Alfreton, Derby, and in Bulwell, Nottingham.

Around 460 people are employed at Alfreton and around 280 at Bulwell. It is anticipated that the majority of the positions at the new site will be filled by existing Co-operative staff transferring, but the new depot is expected to create at least 340 new jobs locally.

Mark Leonard, Head of Logistics Service, The Co-operative Food, said: "The new distribution depot in Castlewood, South Normanton, will provide a major boost to the local economy and employment. It will not only create a significant number of new jobs locally, but its proximity to our existing depots in the area will allow many staff to transfer to the new site, safeguarding around 740 jobs in the region.

"The site is ideally located near to the motorway network and it will help us to continue to provide a first-class service to our growing store network."

The new distribution centre is expected to be fully operational during 2013, when it will service 529 stores throughout the region, covering Yorkshire, Derbyshire, Nottinghamshire and Lincolnshire. It will have the capacity to deliver around 68 million cases of groceries per year.

The state-of-the-art facility will also incorporate several energy-saving and recycling initiatives, including rainwater harvesting to reduce water demand on site and waste oil burning systems for heat production. LED lighting will be installed to cut energy costs by some 60% and help the site to achieve an "excellent" BREEAM accreditation rating, the internationally-recognised green building measurement.

Fergie Taylor, Head of Project Delivery at First Industrial, added: "We are delighted to be working with The Co-operative again on this high profile project. The building is being delivered to best in class standards and when complete will offer major efficiencies."