Space for disabled parking is expected to remain.
The area to be paved is from Cameron St at Noel Leeming and Barfoot and Thompson, around to LJ Hooker and Cotton On in James St.
Miss Mannion said the council hoped to see more outdoor use of the area such as busking and performances, and to enhance the connection between the Town Basin and the mall.
"Lots of research in recent years has shown we don't have to shut traffic out of mall-like areas, we just need to make it obvious to drivers and pedestrians that it is a shared space. That way we still get the ebb and flow of traffic, but we make it safer and more friendly for pedestrians and business owners."
A main feature of the design will be a transparent canopy over the corner of Cameron and James St. It will be designed by Whangarei firm Fabric Structure Systems, that designed the John St canopy and the Cloud in Auckland. Fabrication is likely to start in October, with the canopy put up in mid-2016.
The first stage of the work will see companies such as Northpower and Chorus marking out existing services, and the removal of the present outdoor seating and pavers in the area, some of which will be re-used in the new design.
Later in July, work will start on digging up the road surface.
The footpaths will remain open for the duration of the work, and businesses in the area have been kept fully informed by the council.
The upgrades, minus the canopy, are expected to be finished before Christmas.