Rumours have been swirling in the city for weeks about the business moving to the Andersons Bay site, after it decided not to renew its lease at Meridian Mall.
The rumours intensified when Smiths City confirmed it was moving into the vacant mall site.
A Kmart spokeswoman said yesterday the company did not have any agreement to trade out of the Smiths City building.
In the past week it announced it had not been able to secure a temporary site in the city, but was still committed to finding a permanent store.