Premier Investments bought 41.1 million shares in Myer, it said in a statement, while its billionaire chairman Solomon Lew separately called on Myer's board to resign immediately.
"We will work with other shareholders to reconstitute the Myer Board with directors who have expertise across retail, property, logistics and e-commerce, so that Myer can reverse its decline," Lew said.
Myer declined to comment on the statement made by Premier Investments, while its stock surged 14% to close at A$0.425.
Myer and other brick-and-mortar retailers have been among the hardest hit by the pandemic and have had to depend on millions of dollars in government support.
The 120-year old firm reported a 13% drop in first-half sales in March, mainly due to store closures amid the pandemic.
Lew's clout was on show last year when Myer's then chairman, Garry Hounsell, said he would retire after failing to get support from Premier and its second-largest shareholder Wilson Asset Management.
(Reporting by Riya Sharma; Editing by Rashmi Aich)