Kawakawa's town centre will get the biggest makeover it has ever seen if a proposal to create a public square and a Hundertwasser-inspired library and visitor's centre goes ahead.

The project, which is estimated to cost about $3 million, will include an earth building on what is now a grassed area behind the famous Hundertwasser toilets and new parking off the highway for cars and tour buses.

The building will include a new library, Far North District Council service centre, art workshop, cafe, public toilets, freedom camping facilities and a museum/gallery in a two-storey tower.

A key part of the plan, which has yet to be approved, is to demolish the Gillies St building housing the current library and council offices as well as the now empty post office. The space would be turned into a town square, or atea, opening out onto the Hundertwasser Park and the new visitor's centre.

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The project, called Te Hononga ("The Joining of Cultures"), is spearheaded by the Kawakawa Hundertwasser Park Charitable Trust but managed by Far North Holdings.

Project facilitator Lau'rell Pratt said one of the drivers of the project was the traffic chaos that descended on Kawakawa in summer, with trucks, cars, a steam train, tour buses looking for parking, pedestrians and riders on the Twin Coast Cycle Trail all using the main road through town. With visitor numbers increasing the situation would only get worse, she said.

The proposal would provide obvious off-road parking for buses and cars, new loos to take the pressure off the Hundertwasser toilets, and help keep visitors safe. It would also make Kawakawa a destination instead of a quick stop.

The Far North District Council would lease part of the new building for a library and service centre, helping to make it financially sustainable. Ngati Hine was also closely involved as part of the project's co-governance model.

Far North Holdings boss Andy Nock told district councillors earlier this month that applications for funding had been lodged with Lotteries and the Government's mid-sized tourism facilities grant fund.

The project, if completed, could boost visitor numbers from the current 270,000 to 350,000 and inject an extra $1.75m into the town each year. A timeframe for completion will depend on the outcome of grant applications.

The Far North District Council had set aside $256,000 for parking and other infrastructure in the town.

Last year the Northland Regional Council spent $485,000 buying the building housing the current library and council service centre. The 30-year-old leaky building could be demolished to make way for the town square, though a decision has yet to be made.