Pompey Centre Real Estate Limited has applied to the city council for permission to subdivide the store at the Fratton retail park to allow three new businesses to move in, including the discounter.
It said the existing B&Q unit was 'a relic of the past retail age' and that smaller units would be the future.
Submitted last week, the planning application proposes the B&Q store at the Pompey Centre is reduced in size by about a half to allow three new units to be set up in the building.
Two of these have yet to be confirmed, however planning documents say one of them will have a 'small food component'.
But the third unit is confirmed in the application as being for Aldi which earlier this year revealed it was looking to open a third store in the city.
The application includes a rear extension to the building as a loading dock for the German discounter.
It was drawn up as part of efforts by B&Q to downsize its operations with a planning statement saying the growth of internet sales meaning it no longer needed as much space.
'The current existing B&Q unit is a relic of the past retail age,' the statement says. 'With the rise of online shopping, large scale shopping units are dying out with smaller, more efficient units taking their place in modern day business practice.
'This proposal not only preserves existing jobs, giving B&Q a more sustainable business model to move forward but also provides space for three new retail units, providing both jobs and services to a large, local community while not imposing on the other units surrounding the local area.'
It adds that the development would create an 'enhanced and modern retail site' while having 'no adverse impact' on the surrounding area.
At the end of last year, representatives of the Pompey Centre met council planning officers to discuss the feasibility of the project.
Now that a formal application has been submitted, a final decision on the scheme will be made in the coming months.
A spokesman for B&Q said it would ‘let the planning application run its course’ before providing any further details of its future plans for the store. They added that it would remain open as usual.