A central tree-lined median and space for a future light-rail line will be created as part of the first stage of transforming Constitution Avenue into "Canberra's Champs-Elysees''.
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Final plans for an upgrade of the avenue between Vernon Circle and Anzac Parade will go on public display next week, with work to begin in 2014.
ACT Territory and Municipal Services Minister Shane Rattenbury said the upgrade was the beginning of a long-term vision for a "grand boulevard''.
"What the government's doing here is creating underlying infrastructure for other things to happen along Constitution Avenue,'' he said. "What you'll see is the road infrastructure there and the trees starting to grow. Once you create the opportunity, that's
when people will start to say, 'We'll redevelop along there'.''
The road will be widened to include dedicated bus lanes in each direction, a separated cycle path, improved pedestrian infrastructure and bus priority at traffic lights.
The avenue has been earmarked for a range of possible future developments, including residential and retail outlets.
The upgrade is being funded with $42 million gifted to the ACT by the federal government for the Centenary of Canberra.
Mr Rattenbury said some ageing oak trees would be replaced with mature oaks and there would be an overall increase in the number of trees. "There are some [trees] along the edge that will need to be removed. Some of them are unhealthy and some of them for a space reason. But there will be significant replantings and, overall, an additional 229 trees.''
Some parking will be lost but on-street parking will be provided to support future mixed-use developments.
Mr Rattenbury said it made sense to include dedicated bus lanes on the avenue.
The final design plans will be available for viewing in the Canberra Centre next week and then move to the Civic Library the following week.
The plans can also be viewed online at tams.act.gov.au.