The wholesale market is one of the largest of its kind in the UK
Birmingham City Council has agreed plans to move its Wholesale Markets from the Digbeth to the Witton area of the city.
It said that if the fish, meat and horticulture markets did not move there could be "significant job losses".
The market, which dates back to 1816, is one of the largest in the UK, employing about 1,000 people.
The council's head of markets Matt Kelly said: "The existing site is no longer fit for purpose."
In 2006 the council carried out a detailed study of the existing 21 acre (8.5 ha) site to see if it could be renovated, but found it would have been "totally impractical", said Mr Kelly.
'Ready to go'
The council said it anticipated the new 35 acre (14 ha) site, at The Hub, would attract more business than the existing market and create an extra 200 jobs.
"It is only three miles from the Digbeth site and ready to go," said Mr Kelly.
The council said it feared that if it did not proceed with the relocation to Witton, the market's 80 businesses, and the 4,000 firms they serve, would face an uncertain future.
It added the next stage would be to draw up designs for the purpose-built site. The target date to move is the beginning of 2012.
"The initial feedback from the market tenants was positive," said a council report.
Mr Kelly said he hoped the land in Digbeth could be regenerated.