Ron Mildren had argued at a council meeting in May that the city should not be attempting to accommodate a supermarket proposal by applying a "specific control overlay" and instead should rezone the land.

Now the Victorian Planning Minister has sided with that view and the council's method won't be authorised by the government.

A planning bureaucrat told the council specific control overlays are "reserved for exceptional cases" and the city may wish to look at zoning and other amendments.

Cr Mildren, a town planner by profession, told councillors in May what was recommended was a "backdoor method" that was a "cop out".

"If it's such a good idea why would we not be zoning the land either to the same zone as the land next door.....or if that zone isn't appropriate, being a mixed use zone, why don't we zone it commercial to reflect the actual use that is going to happen," Cr Mildren said.

Now Wodonga Council strategic planner Timothy Cheetham is advocating councillors support the land being rezoned from general residential to mixed use.

A recommendation to be put to the council on Monday night supports that move being pursued by council officers with the minister.

The May meeting heard a small supermarket had been flagged for the block at Baranduda which is behind the suburb's general store.

Store owner Mel Grealy said she would object to a supermarket, as it was a poor location with only a single road in-and-out, past a school, that would lead to traffic bottlenecks.

She said if a supermarket was to be built it would make more sense to have it across the road from the store on land between a car park and Baranduda Boulevard that is already zoned mixed use.

The opening of Woolworths and Aldi supermarkets at White Box Rise has cut Ms Grealy's trade with those working in Wodonga preferring to shop there.

She said "there's no way we could survive" if a supermarket opened at Baranduda, however she doubts such a business would be viable as "there's a lot of houses here but no-one works here".

"Anyone who is going to invest a thousands of dollars needs to think about whether they're going to have the volume or capacity," Ms Grealy said.

"It's not going to work for five or ten years at least.

"It is growing and a supermarket is coming, but is it viable in the next few years? Absolutely not."

The plan, put by a planning firm on behalf of an undisclosed retailer, involves 1300 square metres of floorspace comprising a small supermarket, car park and related facilities.

Woolworths at White Box has 3300 square metres of floorspace.