BURLINGTON — Plans to build a new $2.6 million outpatient clinic for veterans in Burlington, are moving forward.

U.S. Sen. Bernie Sanders said Monday that the Department of Veterans Affairs has picked a contractor — Fortieth Burlington LLC — to build the facility, which will replace a clinic in Colchester that has outgrown its space.

The new clinic on Lakeside Avenue will be nearly twice as large as the Colchester clinic and serve about 4,000 veterans.

It’s expected to be completed in early 2013.

Sanders said the VA now serves about 8,600 veterans at clinics in Colchester, Brattleboro, Rutland, Bennington and Newport, providing primary care, specialty treatment and mental health services.