A temporary roundabout has been put in place at the Victoria Ave and Dublin St intersection as the traffic lights are upgraded.
The roundabout was installed on Monday. The old traffic lights will be removed over the next few weeks.
The $150,000 project is expected to be done by the end of next month.
Whanganui District Council senior roading engineer Brent Holmes said the intersection's traffic equipment was out of date and had become unreliable.
The basic existing layout will be retained but lane alignments improved. A new raised pedestrian/cycle platform crossing will be installed across the left-turn slip lane from Dublin St into Victoria Ave.
Holmes said the current layout had limited pedestrian protection.
"The proximity to Whanganui Intermediate School and recent and projected growth in pedestrian and vehicle activity in Whanganui means an upgrade of this area is a priority."
Kerbs, channels and footpaths along Victoria Ave will be upgraded to be user friendly and to improve drainage.
A traffic camera will also be installed, and the intersection controller will be connected to the fibre network to provide 24/7 monitoring of faults.
The intersection is Whanganui's second busiest behind the Glasgow St/Victoria Ave intersection, which was upgraded this year.