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The pedestrian zone would include the narrow section of Jetty St between Cumberland and Crawford Sts, as well as the areas beneath the Jetty St bridge.
The Dunedin City Council proposal was first put before a hearings committee in August.
It was supported by several business and property owners of the surrounding Warehouse Precinct but attracted stout opposition from the Fire Service.
The pedestrian zone would limit access for emergency vehicles to surrounding buildings and limit the street's value as a thoroughfare for fire appliances, the committee was told at the time.
But collaboration between council staff and the Fire Service has brought a collection of tweaks to the proposal.
Changes included:Ensuring new paving remained at present road surface levels.
Removing the need for bollards to block the street to traffic.
Retaining two-way traffic on the Vogel St section that crossed Jetty St;Changes to the Police St-Crawford St traffic island, making it mountable for emergency services vehicles, meaning an alternative access point to nearby streets.
The changes ''appear to adequately address all of our concerns in relation to access and emergency response'', East Otago assistant area commander Craig Geddes said in a letter to the hearings committee.
Mr Geddes said the ''constructive and consultative approach'' taken by council urban design team leader Dr Glen Hazelton ''has allowed us to arrive at an acceptable solution''.
Dr Hazelton told the Otago Daily Times yesterday the resolution between the council and the Fire Service had removed the ''major stumbling block'' facing the pedestrian plans.
Working with the Fire Service had been productive and satisfying for both sides, he said, and some of the agreed changes even improved the plans from an urban design perspective.
With significant new businesses set to move into the Warehouse Precinct and further hospitality premises on the horizon, the pedestrian section would be well used if approved, Dr Hazelton said.
It would also improve the main pedestrian link between the area and the harbour precinct, via the Jetty St bridge.
The other major objection to the initial proposal came from hill suburb residents concerned the closing of that section of Jetty St would lengthen their daily commute.
Dr Hazelton said a lot of work had been done analysing other routes to see if changes could be made to improve those routes for hill suburb commuters.
Possible changes included altering turning bays, adding priority turns and additional lanes, and changing the phases of some traffic lights.
However, council staff found ''no cost-effective, practical or meaningful improvements'' could be made.
Several other routes were available to the affected motorists and it was not considered practical to make changes for such a small number of people.
The proposal's fate would now sit with the hearings committee, which would meet next Wednesday.
The committee would decide whether to recommend the proposal be approved or declined.
Their recommendation would then be taken to a full council meeting, likely to be on December 14, where the council would vote on the proposal.
If approved, a one-month appeals process would follow.
Dr Hazelton said under the best case scenario, the pedestrian zone would be built in the middle of next year.
The work's $500,000 price tag was already budgeted for in this year's Warehouse Precinct Amenities Improvements budget.
That parcel of money was earmarked for the Jetty St plan and would roll on to the next financial year, as needed, he said.