Whanganui District Council will receive government funding to revamp Drews Ave into a more "pedestrian-friendly" space.
The money is from Waka Kotahi NZ Transport Agency's (NZTA) Innovating Streets for People fund.
NZTA's urban mobility programme manager Kathryn King said the Innovating Streets pilot fund, which provided 90 per cent of the funding for projects, supported "quick, low-cost interim improvements that create more people-friendly spaces in our neighbourhoods".
"These interim projects can then be evaluated and used to inform permanent upgrades," King said.
District councillor Helen Craig, who chairs the Town Centre Regeneration Project, said project manager Ellen Young had been working on the transformational project for some time.
"Through this project, we'll be revamping the streetscape, making it more welcoming and vibrant so it's a place where pedestrians want to wander and enjoy our heritage and artistic community," Craig said.
"This project will also assist with our economic recovery post-Covid-19, shining a spotlight on Whanganui as an arts destination for visitors from other regions."
Young said Drews Ave was a "crucial connecting route" between public spaces.
"It provides a link from the river and i-Site Visitor Information Centre up to the Sarjeant Gallery and Regional Museum in Pukenamu Queens Park, with creatives, cafes, UCOL and NZ Glassworks en route.
"We'd like to see thriving pedestrian activity between these key cultural areas."
Young said a series of community workshops would be run to co-design and co-create the precinct.
"We're looking forward to engaging with the community for this exciting, collaborative process."
The amount of NZTA funding is not known. A council spokesperson said the council was still finalising the budget with NZTA.
The council will apply for CBD enhancements in Guyton St and Victoria Ave in the next Innovating Streets funding round, which closes at the end of this month.