Pedestrian safety and amenity are at the heart of the significant redevelopment which comes more than a decade after the town's iconic Mall made way for two-way traffic.

A new pedestrian crossing will be installed in front of the Town Hall and shire offices, improving pedestrian access to those facilities and the town's shopping strip.

Under the $100,000 project, Stawell's existing streetscape will also be extended from the corner of Wimmera Street to the new crossing.

In making the announcement, Member for Western Victoria Region, Simon Ramsay said the works will hopefully result in more trade for shopkeepers in Main Street.

"I understand these streetscape works started back in 2003 before coming to an abrupt halt. Hopefully we can now move forward after a hiatus of nearly 11 years," he said.

"This is great news for pedestrians - both on foot and on bike, but also for the retailers who are hopefully going to benefit from an enhancement of the streetscape."

Northern Grampians Shire Council Mayor, Cr Kevin Erwin said the investment will help continue a plan initiated with the reopening of Stawell's Main Street to traffic more than a decade ago.

"This is a great project for the community and visitors to Stawell," he said.

"The Stawell Streetscape project will include landscaping, bench seats and alfresco areas for on-street cafe use.

"The new crossing will improve access from the south section of Main Street between Waacks Bakery and Pykes Pet Shop, providing more equitable access for pedestrians in this high use area."

Cr Erwin said landscaping works will enhance the appeal of the street for residents and visitors to the town and the new pedestrian crossing will provide better access for pedestrians.

"The pedestrian crossing is something that has come about as a result of the community, it is something that is desperately required and gives that added sense of safety to this project," he said.

StawellBiz president Chris Waack said the volunteer business organisation welcomed the announcement.

"The development of Main Street is going to make the flow of traffic through the street a lot better," he said.

"It will improve access for people - particularly our elderly residents, but everyone will be able to get around the street a lot easier."

Liberal Candidate for Ripon Louise Staley said the $100,000 project is being funded equally by the Victorian Coalition Government's Transport Investing in Regions initiative and the Northern Grampians Shire Council.

"The new crossing, together with realigning and upgrading the pedestrian footpath, will make the street safer and better cater for pedestrian traffic at busier times of the day," she said.

Mr Ramsay said regional Victoria played a critical role in the state's prosperity.

"The Coalition Government is partnering with regional councils and local organisations to invest $2.3 million in a suite of 31 projects to be carried out across the state," he said.

"The Transport Investing in Regions initiative is a great example of how the Victorian Government is working with councils and local organisations to build stronger communities in regional and rural Victoria."

Redevelopment of the Stawell streetscape is expected to commence later this year and be complete by mid-2015.