Designs for the project were prepared in 2003 for the Alexandra Community Board and since then successive community boards have revisited the matter several times, postponed the work, scaled back plans and pruned the budget.
Work began this week on the first stage of the planned upgrade, which will cost about $536,000.
It is being funded by a loan of $300,000, to be repaid from rates, and $237,000 from the flood amenity grant.
Letters were sent to 75 business owners and occupiers a fortnight ago outlining details of the work.
"The purpose of the upgrading is to improve the appearance of the area, provide a consistent design theme between the commercial areas and improve pedestrian flow," Central Otago District Council roading manager Julie Muir said.
The major work involves replacing the cobblestone footpaths in Tarbert St and Limerick St with asphalt footpaths.
Ms Muir said many different options had been considered for the footpaths.
Some were too expensive while others would cause too much disruption to businesses.
For example, exposed aggregate concrete was rejected as it would take several days to cure and people would not be able to access businesses during the several days of curing.
It had been hoped to reuse the existing cobblestones as a band within the asphalt footpaths but the because they were herringbone-shaped, that would have taken too much work and been more costly than replacing the entire area, she said.
Some of the cobblestones were also dirty and weathered, so the overall look might have been shabby.
"The combination of asphalt and concrete paving bands has been chosen because it is cost-effective, has a quick construction time, provides a timeless and smart appearance and the materials will be readily available in the future for undertaking repairs," Ms Muir said.
The existing yellow metal arches, bollards, pergolas and rubbish bins would be removed and new bins, similar to those in the town's Golden Block, would be installed.
Bike stands and seating would be upgraded and shade sails might be provided in summer.
The raised paved tree areas between the carparks in Tarbert St would be removed and the trees relocated to Pioneer Park.
Raised garden planters would be used to landscape the area and would incorporate seating.
The roadway would remain cobblestones with new kerbs installed on the Limerick and Tarbert Sts intersection.
An extra pedestrian crossing would be added across Limerick St, from the Warehouse entrance.
The first stage of work was expected to take eight weeks, the footpath on each side of the street taking about three weeks to replace.
The second stage would focus on the area by the monument
Quick summary
•Cost: About $536,000 including $300,000 from ratepayers.
•Area covered: The main business area in Tarbert St.
•How long it will take: About eight weeks for the first stage.
•Project includes: new footpaths, replacing cobblestones; new street lighting; removing and relocating trees in Pioneer Park; replacement kerbing; removal of arches, bollards and pergolas; raised schist planters; new pedestrian crossing at The Warehouse.
