The state government is proposing to remove hundreds of loading zones and parking spots in inner Sydney and also narrow some footpaths in the crowded city centre.

The proposals, which comes after Roads Minister Duncan Gay said future cycleways in the city may have to share road space with loading zones, threaten to open another front in the fraught relationship between the Baird government and Clover Moore's City of Sydney Council.

A plan developed by Roads and Maritime Services and Transport for NSW, on display until January 9, includes 17 projects aimed at improving the flow of motor traffic through the city.

But some of the initiatives in the Sydney City Centre Capacity Improvement Plan are contentious, including a proposal to narrow the width of the congested footpath on Market Street near George Street.