The $3.7 million upgrade to Blackbutt Village in New Lambton is set to commence next month.
Newcastle Lord Mayor Nuatali Nelmes said the results from community consultation on the project last year revealed concerns about safety, particularly when crossing the busy Orchardtown Road.
"Our team have been busy developing a design that both improves safety and encourages pedestrians and cyclists to the area, as well as making it a safer place to park your car and visit the local shops," Cr Nelmes said.
The upgrade will include an off-road shared pedestrian and bike path, a new pedestrian crossing, and the introduction of a 40km per hour speed limit.
Ward 3 Councillor and Chair of the Infrastructure Advisory Committee, Peta Winney-Baartz said the upgrade will also focus on improving the entire public domain to help promote local businesses.
"Wider footpaths and new plazas will improve outdoor dining and promote activation of the area, while its look and feel will be improved with renewed drainage, kerbs, gutters, road surfaces, footpaths, lighting, street furniture, tree planting and landscaping," Cr Winney-Baartz said.
Construction is expected to be completed by early 2024.