The $26.6 million package would be spread across a number of precincts within the Palmerston North central city.

Palmerston North's $26.6 million central city streetscape makeover that puts pedestrians before vehicles has been criticised for inflicting big city thinking on a provincial town.

City councillor Vaughan Dennison said he had some sympathy for retailers who did not want the council "imposing a big city solution" where shoppers still wanted to find a car park at the front door of the shop.

But Manawatu district mayor Margaret Kouvelis has applauded the plan, and said there was no time for negative thinking.

Supplied A green space for play and activity could replace a grey expanse of empty footpath on The Square between Main St and Broadway.

Palmerston North needed to establish itself as an attractive heart for the region, she said, with a central district that was filled with people and activity.

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The plan would blur the edges of The Square, with more green spaces and narrower streets. 205 car parks would be removed, pop-up canopies would be added to a pedestrian-focused Broadway Ave, and an urban bus terminal developed in Main St East.

Supplied Palmerston North's central city streetscape makeover is likely to begin with an upgrade to the urban bus terminal in Main St East.

"I can't speak more strongly about the need for this city to proclaim itself a strategic hub, not just for the region, but for New Zealands," Kouvelis said.

"The spotlight is on us. New Zealand is looking for us to step up."

Her comments echo those of Charles Landry, whose Creative City Index analysis of Palmerston North in 2013 summed up the city as comfortable and complacent, in danger of sinking into gentle decline.

"There definitely needs to be more energy and the city's pulse should beat a bit harder," Landry said.

People in The Square on Wednesday generally liked the idea of making the central city more user-friendly.

"Anything that will bring people back into the centre of town is great," said Bill Brock.

"It's got to be good for the city," said Tony Tautari.

But Lynda Mackenzie said, "They could probably do it for cheaper [than $26m], but doing something with Broadway in particular is a great idea."

City businessman Steve Williams, representing eight property owners in the central business district, said while revitalisation was obviously needed, the plan had some "disastrous elements".

He objected to the gradual removal of 205 car parks, switching from angle parks to car parking at 90 degrees to the kerb, and the location of the urban bus terminal in Main St East.

Former mayor and National list MP Jono Naylor said improving the streets around The Square was an unfinished aspect of the City Heart project, that had poured $24m into The Square in the 2000s.

"But this plan goes a bit further than we envisaged with City Heart, and the price tag has gone up a whole lot too.

"The Square needed some wow factor.

"The question mark now is how much more do we spend on the CBD?"

Long-serving councillor Jim Jefferies said he was delighted to see the council finally endorsing a plan to build on the benefits achievements within The Square.

"This reflects why I stood for council many years ago. That was to support and execute a vision for the city, to make this a great place to live, work, study and play."

He said it had been "tough" to complete The Square makeover in light of negative commentary about the expense.

He said councillors had been "scared off" from making decisions that would have enduring benefits during the last decade.

Downtown shopping centre manager Greg Key said the owners and managers of the complex generally applauded the streetscape plan.

However, they were concerned about how extending the urban bus terminal in Main St would affect access to the centre's own parking building.