Just before 7am on Tuesday, one of town's most prominent rumours was finally verified with council announcing an agreement to move to the Bridge Street premises.

But, in the minutes leading up to 9am - it had already been denied.

The faux pas came via mixed messages from Muswellbrook Shire mayor Martin Rush and council's general manager Fiona Plesman, who gave contradictory statements over the proposed shift.

Speaking to the ABC, Ms Plesman said an arrangement had been made with Metcash, who are the chief leaseholders for the current IGA site, and they would soon be undertaking further action.

"We have come to an agreement with them, so we will be in a position very soon to begin our community engagement and provide a lot more detail," she explained.

Whispers surrounding council's relocation had picked up since last week, when a letter appeared outside the supermarket stating the move was a done deal and they were to begin downsizing over the next six-to-nine months.

However, less than two hours after Ms Plesman's comments, Cr Rush told the audience at the Muswellbrook Chamber of Commerce and Industry Budget breakfast a transition to that location was just one of several options and nothing was settled upon.

"I don't want to answer for IGA except I can tell you this, there is no finalised agreement," he said.

"At the end of the day it's a worthy option to explore and we're exploring it.

"But, until there is an agreement between the two parties and it's finalised, it's a bit difficult to announce anything."

However, since then, a council spokesperson attempted to clarify the situation.

"Council accepts that the comments have generated confusion," they said.

"What was intended to be relayed to the community was that broad principles of agreement have been reached and that the details remain to be sorted through before the agreement is signed."

But, despite an offer being on the table, the spokesperson also said there was no guarantee the parties would work through the fine print.

"Council has other options in addition to the option it is exploring with IGA," they revealed.

"The negotiations are ongoing, they may take a month or they make take less."

The background behind how the opportunity became possible was consistent from the two council officials however, with both stating Metcash had approached Muswellbrook Shire Council (MSC).

They revealed the store was struggling and would be unable to continue operating at their current size, which led to the leaseholders reaching out to see if council would consider it for at least a temporary home.

IGA will not be shifting but simply "softening its footprint" under the proposed deal, or confirmed deal depending on who is asked, and would cut their size by two-thirds to allow space for 77 work stations.

The unused space above the store and behind the Upper Hunter Conservatorium of Music, dubbed "the void" by the MSC general manager, would also be refurbished and used for operations.

Although Cr Rush was adamant pen hadn't touched paper, he did appear to be spruiking the move when questioned about it.

"It's a good option in many respects," he said.

"As an interim option it allows us to help them out, it allows us to bring our considerable workforce into the town centre, having coffees, buying locally, having lunch locally.

"It also makes us much more visible immediately.

"I think one of the problems with where we are now that we're a bit disconnected."