Enterprise Dunedin announced that as part of Dunedin marketing and public relations activities for the three city concerts, it had commissioned city artist Tyler Kennedy Stent to create a "lasting legacy of the pop legend''.
The image of the singer will appear on a Bath St wall over the coming week.
The piece of art is to cost $8350, to be paid by Enterprise Dunedin , part of the Dunedin City Council.
The work is expected to begin in tomorrow.
Enterprise Dunedin director John Christie believed the initiative - helped by the Dunedin Street Art Trust- will further reinforce Dunedin's reputation as a creative and innovative city, when it comes to major events.
Although a relatively small city in global terms, Dunedin was "incredibly fortunate'' to have world-class facilities such as the Forsyth Barr Stadium for hosting major events, Mr Christie said.
"On this occasion, we will literally Paint the Town Ed,'' he said.
The Bath St art work would also encourage concert goers to promote Dunedin to friends and family via shared imagery online.
The lower Octagon will be closed to traffic from Wednesday March 28 for six days, creating a central pedestrianised hub for all things Ed.
The partially-closed Octagon would be temporarily transformed from its usual state into a vibrant, family-friendly space, filled with street furniture, plants, and accent lighting.
During the concert weekend an `Easter Ed Hunt' competition will also be run via DunedinNZ's Instagram account, and participants were asked to take snaps in front of a series of central city locations, to be in to win, he said.
Ed Sheeran will perform in the city at three concerts, on March 29, March 31, and April 1.