West Dunbartonshire Council said it had to spend the money because land occupied by the Victorious Inn takeaway in Alexandria was needed for the redevelopment of Mitchell Way, where the business is currently situated.
However, as the owners of the takeaway have a lease until 2020, the authority said it had to find them new premises. It is advertising for a contractor to convert a shop in nearby Bank Street into a restaurant and takeaway, allocating £130,000 to the project.
A worker at The Victorious Inn confirmed the business was moving and said he believed the owners were "quite happy" with the arrangement.
The new property, which is a two-minute walk away at 45 Bank Street and is unoccupied office space, will be stripped out. Builders will remove floor tiles containing asbestos, carry out structural work, put up new partitions and install staff and customer toilets. Contractors have also been told a bar and restaurant fit-out is necessary, with a new kitchen to be installed.
Scottish Socialist Party councillor Jim Bollan, whose Leven ward includes the takeaway, said he supported the wider regeneration project in the area, which he believes will boost the local economy. However, he said he had questions over the £130,000 price tag of moving the takeaway.
He said: "The figure does look excessive and officers should explain why the cost is so high."
The Mitchell Way area has been identified as a key area for modernisation by the Labour- run council, with the central Alexandria site identified for regeneration extending to seven acres.
The local authority is developing a marketing brief for the site to attract developers to invest in the area, following a £770,000 investment.
A council spokeswoman said: "Mitchell Way was been identified as a key regeneration site as part of a plan to develop a 35,000 sq ft supermarket, additional retail units and social housing.
"To allow the full regeneration work to be completed, the council terminated all existing leases and is moving a food outlet that has a lease until 2020 in Mitchell Way.
"The business agreed to the council's offer, which is the same standard and space as the previous let."