By Anhar Khanbhai

Hardware chain Bunnings today said it would create 6000 jobs in the next three years as part of a $1.5 billion expansion plan as it battles with rival Masters stores for market dominance.

Bunnings said its plan to build up to 85 new stores in Australia would also create more than 11,500 construction jobs.

"We're very excited about the opportunities we see ahead," the company said in a statement.

"Expanding our network will allow us to serve more and more communities," managing director John Gillam said.

Bunnings will today open its 200th store, in Greenacre, in Sydney's southwest.

The opening marks18 years since Bunnings opened its first outlet in Sunshine, in Melbourne's west.

The hardware chain is owned by Wesfarmers, the diversified company that also owns the Coles supermarket chain.

Wesfarmers last announced such a significant investment in new stores in 2010 - when they invested a substantial $600 million to establish 18 new stores across the important NSW market.

Rival Woolworths has established the Masters hardware brand and recently opened eight stores, in direct competition with Bunnings.

Earlier this month, Woolworths outlined the retailer's adventurous new designs for its new Masters hardware stores, announcing a lofty ambition to build the brand into a $6 billion business within five years.

The company's chief executive, Grant O'Brien, said he expected Masters to be able to generate similar earnings to major rival chain Bunnings.

Woolworths opened the first Masters stores in September and plans to open 150 stores around the country.

Woolworths plans to open another 12 Masters stores before the end of August 2012.