Amazon is plotting a major expansion of its Australian business with plans afoot to build one of the country's biggest warehouses in Western Sydney and a search under way for a giant shed in Melbourne.

The local expansion plans come on the back of surging online sales due to COVID-19 as well as a deeper structural shift away from bricks-and-mortar retail towards state-of-the-art logistics assets that can cater for the rising demands of e-commerce such as same-day delivery.