Superdrug will take over the 6,979 sq. ft. unit currently occupied by Chic and Clarks, and is scheduled to open its doors in the autumn.
The larger unit will allow Superdrug to bring a wider range of products, while the retailer's existing town centre store will be rebranded to its sister brand Savers, stocking a range of health, beauty and household goods.
James Shepherd, Estates Director at Dransfield Properties, which owns and manages Marshall’s Yard, said: “We are really pleased to be announcing this new investment in the town and look forward to the new stores opening in the autumn.
“The move will allow Superdrug to have a much larger store in the town and the company is also investing in rebranding the existing store into its Savers format."
The announcement comes as footwear giant Clarks announced it was to leave Gainsborough after making the decision not to renew its lease.
The shoe shop, which has been at Marshall’s Yard for the past three years, will close on Monday September 2.
Matthew Eliot, the franchise owner for Clarks Gainsborough, said: “After trading in Gainsborough for the last three years, we have made the difficult decision not to renew the lease on our property.
“We continually review all of our stores to ensure that they are the right size and located in the right areas in order to provide the best possible offering and environment on the high street to its customers.
“We would like to thank all our customers who have supported us and all the colleagues we have worked with both past and present. We would also like to thank the Marshall’s Yard team for their support and input.
“Clarks will continue trading in our other nearby stores in Retford, Doncaster and Lincoln.”
Chic also announced its intention to leave the Yard and will close on August 31, but is planning to launch an online store.
A spokeswoman for the shop told customers: “Despite all of your kind custom and our team’s hard work and dedication, we have been unable to find a way to make the shop profitable long term.
“We will also continue to be searching for other retail opportunities in the area.”