Plans for a new roundabout at a busy St Clair intersection are being welcomed by business owners who say it is lucky nobody has been killed there.

The Dunedin City Council yesterday announced plans to build a new roundabout, pedestrian crossings and other improvements at the intersection of Victoria and Forbury Rds.

Hjarne Poulsen.

The intersection was used by motorists turning into the Esplanade at St Clair, as well as the area's numerous beach-goers and cafe and restaurant patrons.

The work, which was subject to public consultation, was expected to cost $100,000 to $150,000 and, all going well, would be completed by mid-year, council safety team leader Hjarne Poulsen said.

Zaibatsu Hair Art owner Jaimee Smith, whose business overlooked the busy intersection, said the improvements were welcome.

There had been about six crashes at the intersection in the 15 years she had worked in the area, and it was a surprise nobody had been killed.

''It's a really dangerous intersection ... I have seen accidents. I have been there and dealt with it. They have got to slow [traffic] down,'' she said.

The Esplanade at St Clair was a popular and busy destination, and the council needed to act to make sure it remained ''an awesome area'', she said.

''The council need to do more to make it more interesting, but they also need to make it safer.''

Alex Aerakis, owner of Salt Restaurant at St Clair, was yet to study the proposal in detail, but welcomed the intention.

''It definitely needs to be looked at to try and make it safer.''

Mr Poulsen said the improvements aimed to slow traffic and make the intersection safer and ''more attractive''.

That would include adding a roundabout and pedestrian crossings on each of the roads connecting to the intersection.

An existing pedestrian crossing and bus stop in Bedford St would be removed, but the bus stop further down Bedford St would remain.

Four car parks would also be removed from Victoria Rd, to improve visibility, but two would be reinstated in Bedford St.

The council's plan had support from the Otago Regional Council, Fire Service, police, Spokes and the Automobile Association, but businesses and residents were now being asked for their views.

If confirmed, the work was expected to take three months and be completed by the end of June.