Victorian Livestock Exchange has purchased land for a new West Gippsland saleyard facility.
The 34-hectare property is located in Bunyip North, off Tonimbuk Rd, and fronts the Princes Freeway.
VLE managing director Wayne Osborne said housing was no closer than 600 metres to the site, which would continue to be farmed while the design was finalised and permits obtained.
"Along with the major aspects of VLE's current facilities - these being multi-agent, soft floored, fully roofed and independently operated - VLE will be seeking to incorporate several environmental enhancements into the overall property," Mr Osborne said.
"These will be focused on solar power, carbon capture and methane reduction."
There was also space for future holding paddock facilities and agroforestry production.
Mr Osborne said the site provided "the most equitable outcome for all users and minimises impacts on surrounding homeowners".
"There has been much speculation since VLE made its recent announcements but we again assure farmers and the industry that the Pakenham saleyards will not close until the new facility at Bunyip is constructed."
"Being almost exactly halfway between the existing saleyards of Warragul and Pakenham, the new facility will replace both of these yards and will secure live auction livestock marketing in West Gippsland for decades to come."