The New Zealand Transport Agency will pay 57 per cent of the roadworks, under its minor safety improvements budget.
The strip of pin oaks that run down the middle of the carpark will be left in place and regularly pruned to limit their size.
But some of them may have to be removed in future if they grow too large.
Council parks and recreation manager Garry Page said in a report to councillors the pin oaks would grow larger than originally anticipated. Mr Page said council staff had considered a number of options, but said the pin oaks could grow up to 23 metres high and 20m wide and would have to be removed.
The Rotorua District Council will remove pin oaks from the side of its carpark on Haupapa St and change the intersection into Fenton St.
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"Trees on Haupapa St will soon be touching nearby buildings.
"If the branches are not controlled, paint will be rubbed off nearby buildings, allowing moisture to penetrate the plasterwork," he said.
"The density of the trees will result in that portion of Haupapa St becoming a shady and dark place, negatively influencing pedestrian and traffic safety and the amenity of the streetscape.
"Minor pruning work has continued to provide a temporary solution to the issue. However, this is not a viable long-term solution," Mr Page said. Councillors said some of the roots were already damaging footpaths and would cause further problems in future.
They voted unanimously to go ahead with the proposal.