The supermarket has purchased the former Ultimate Outdoors site at Merry Hill retail park, which has been vacant since March last year.
When the store opens it will create around 40 full and part time jobs.
A spokesperson for Lidl said: “We can confirm that we have purchased the site and secured planning permission to bring a new Lidl store to Merry Hill Retail Park.
"We look forward to investing in Dudley and creating more job opportunities for the local area. We would like to take this opportunity to thank everyone for their support so far.”
The German discount chain has not yet confirmed an opening date but has said they ‘look forward to starting construction in due course.’
Currently, the closet Lidl supermarket to Merry Hill is on Lower High Street, in Cradley Heath.
It comes after the popular supermarket announced in January it would be opening 50 new stores across the country this year.