Construction works are set to begin this month and the inauguration of the store is expected to take place by the end of 2018, IKEA said in a press release.
"Because we already received the authorization for land and fencing in September, the general builder began preparing the ground and fencing for the the IKEA Pallady store," IKEA South-East Europe property and expansion manager, Vladislav Lalić, said.
In September, the furniture retailer said that Romanian construction and development company Bog'Art has won a tender to build IKEA's second store in the country. The 37,000 sq m store will be located in the eastern part of Bucharest and will employ around 300 people.
At present, IKEA has one store in Romania, in northern Bucharest.
IKEA unveiled its plan to open a second store in Romania - an 80 million euro ($88 million) investment project, in November 2016. It also said at the time it planned to open three more stores in Romania by 2020 - in Timisoara, Brasov and Cluj-Napoca.
IKEA's sales in Romania grew by 21.2% year-on-year to 514 million lei ($125.5 million/114 million euro) in financial year 2016 ended August 31, value added tax excluded, mainly due to an increase of online orders.
IKEA's first Romanian store was opened in March 2007 under a franchise and became part of the IKEA Group in March 2010. The company operates more than 330 stores in 40 countries and has close to 154,000 employees worldwide.
(1 euro= 4.5841 Romanian lei)