By the end of 2017, City Representative Peter Svarzbein said the Kern neighborhood and the Cincinnati Entertainment District will see the improvements first proposed two years ago.
City council approved the project earlier this month and the funding will come from the 2013 Street Infrastructure Certificates of Obligation.
Svarzbein said the project will focus on making the area safe for pedestrians by including wider sidewalks, better parking and more lighting.
"With the street car coming in, it seemed that this was a good time to tackle those issues of parking but also of pedestrian safety in this area," Svarzbein said.
The cost of the improvements will total $2.8 million.
The Camino Real Regional Mobility Authority, which is overseeing the Streetcar Project will also be in charge of the construction.
"We've always envisioned a pedestrian walkway with patios in front where people would be sitting, eating, and drinking out on the street and enjoying El Paso's wonderful weather," said George Cisneros, owner of Geogeske Restaurant.
He said it has been a challenge to keep business booming during ongoing construction projects in the area, including the Streetcar Project.
When the streetcars are rolling through and improvements to the area are complete, Cisneros said he hopes more customers return to support the local businesses.
"It's going to work really well in conjunction with the streetcar and it'll really make El Paso shine," Cisneros said.
Svarzbein said the construction will take place in conjunction with the Streetcar Project which will save about 6-8 months in construction startup time.