Post Office Limited (POL) has assured customers that its Chichester branch will not be relocating to WHSmith in North Street.
Last week, a letter caused confusion to customers at the Sussex Stationers shop in North Street when it said the branch would 'transfer to WHSmith High Street Ltd who will continue to operate from the current premises'.
The letter said this was part of its 'continuing modernisation' of the Post Office network.
The Post Office has now clarified that the branch will continue to operate from the current premises at Sussex Stationers.
A Post Office spokesman said: "We are changing the way we operate Chichester Post Office. From Thursday 24 January 2019 the branch will operate through a franchise agreement with WHSmith, rather than being directly managed by the Post Office.
"The branch will continue to operate from the current premises in Sussex Stationers, offering the same great range of products and services."
In the letter to its customers, network and sales director Roger Gale confirmed that opening hours will also increase to include Saturday afternoons and Sundays.
He added: "Our priority is to ensure that we provide services that will meet customer needs, both now and into the future, in a way which will secure the long-term viability of Post Office services in Chichester."
The proposed transfer comes after an agreement by Post Office to expand the number of branches in WHSmith stores, to help 'secure high street Post Offices'.
Post Office said WHSmith currently runs 135 Post Offices within their high street stores throughout the country, and under the new agreement, up to a further 40 are planned to be relocated into stores in 2019.
It said this is to support the 'long-term sustainability' of Post Office branches and 'bringing longer opening hours for customers in many areas'.
Mr Gale said: “WHSmith and Post Office have worked together successfully for more than a decade and our collaboration helps to secure our services on high streets for years to come.
“We’re continuing to respond to unprecedented change on high streets and in consumer trends.
"By adapting to the needs of customers we’re making sure Post Offices will matter as much tomorrow as they do today, with services available when and where people want them, in convenient locations and open for longer hours, including Sundays."
Following the release of the original Post Office letter, the chairman of Newtown Residents Association, Keith Mitchelson, said business owners and residents already felt 'short changed ' as a result of the move from a main General Post Office to two till positions at the back of a shop.
He added: "It seems to me by moving to another shop and having to negotiate past narrow aisles loaded with merchandise together with queues at the WHSmith tills is a long way short of a professional service culture.
"I believe with so many retail units available in central Chichester then the obvious decision is to have a stand alone unit. It does not have to be vast."
However, Mr Gale said it is the 'best way to run' Chichester Post Office.
He added: "The change of management of the branch to a retail partner rather than by us directly is a commercial decision and we are not seeking feedback on this aspect of the change.
"However, we welcome feedback and comments that can help inform our plans."
Post Office said the branch transfers are 'subject to six-week local public consultations'.
People can express their views by email to email@example.com or via a questionnaire at postofficeviews.co.uk. The unique code for the Chichester branch is 263937.
Alternatively, you can pick up a form from your nearest Post Office.
The closing date for responses is November 14.