The retail giant has submitted early details of its proposals to build a 50,000 square foot supermarket to North Somerset Council.
If approved, the new store would be built between the Gordano Gate Business Park and Homebase on Serbert Way.
It would form a triangle of supermarkets with the nearby Waitrose on Harbour Road and Co-op on Wyndham Way.
The proposals have sparked a mixed reaction in Portishead.
Greg Corrigan, of Portishead Chamber of Commerce, said while his organisation welcomed investment in the town, it would be concerned land designated for employment use could be lost to retail.
He said: "The site is currently designated for business units and attracting more small and medium sized businesses to Portishead is the chamber's preferred means of growth."
He added the proposed supermarket was some distance from the High Street and could have a negative effect on some High Street stores.
Sainsbury's has sent draft plans to North Somerset to see if it needs to prepare an environmental impact assessment before formally seeking planning permission.
The store would have a total sales area of 30,000 square feet and 357 car parking spaces. It is understood the store could open by the end of 2010,
In its submission, Sainsbury's said: "The site is partially brownfield in nature and is currently designated as a safeguarded employment area.
"The site is under the sole ownership of Sainsbury's.
"The foodstore is proposed to be accessed by customer traffic from Serbert Way, while service access will be gained from Serbert Close."
Portishead Town Council chairman David Pasley said the supermarket had opened informal talks with the town council about its plans.
He said: "When Waitrose opened it provided a great boost to Portishead and I think this would create a similar benefit."
North Somerset Council leader Nigel Ashton said: "It would create employment in the town and bring welcome private sector investment."
The company announced yesterday that half-year profits were up more than 30 per cent to £342 million.
A number of national chain retailers have recently opened in Portishead as it defies the recession.
Pets at Home, New Look, Peacocks and Dreams have opened stores on the former Quitmann furniture factory site on Old Mill Road.