The project entitled Transform Oxford will see some historic roads completely pedestrianised.

It will also result in the number of buses coming into the centre, currently around 200 an hour, being reduced by 50%.

County council chiefs said work on Queen Street, George Street, Magdalen Street and Broad Street will begin next year. It will include relocation of bus stops, widening of pavements and replacement of street furniture.

Frideswick Square will then be given a facelift in 2011 with a complete reworking of the junction and removal of all traffic lights from the square.

Plans are also in place to introduce "state-of-the-art" airport style buses and a "smart ticket" system to cut queues at stops.

The work is due to be completed in 2013.