The Shifnal Integrated Transport Scheme was supported by town councillors at a full council meeting earlier this month.
Costing £2.7 million, the project aims to ease congestion and slow vehicles down as they approach the junction joining Aston Street, Victoria Road, Bradford Street and Market Place.
The proposals, which were chosen from three options put forward by Shropshire Council, will see traffic-calming measures introduced, including replacing the Victoria Road traffic lights with a zebra crossing and raising the surface of the road.
A second pedestrian crossing will also be created where Market Place meets Victoria Road.
The scheme will also see footpath and highway improvements between south of Church Street on the A464 to the Bradford Street/Shrewsbury Road junction. Additional landscaping and public seating areas will also be included.
Community Infrastructure Levy (CIL) contributions from new housing developments within the town will be used to deliver the project.
The town council is also considering options to further enhance plans using CIL money currently held in reserves.
A spokesman for Shropshire Council said: “The scheme has been approved by Shifnal Town Council and now detailed design work will take place ahead of a target construction date of next year.
“Shropshire Council officers and representatives from engineering consultants WSP attended a meeting of Shifnal Town Council to present plans earlier this year.
“Now the town council has voted to back Option 3, which includes some changes to the proposed layouts, but have retained the aspirations and conceptual ideas and materials included in the consultation documents presented to the community back in 2015.
“This option takes into account the informal feedback received by Shropshire Council from members of the town council, while still working within the financial constraints.
“We are pleased to confirm members of the town council agreed to formally support Option 3, subject to further feedback which will be forthcoming after the November full council meeting.
“It is now Shropshire Council’s intention to finalise the detailed design by the end of the calendar year with a view to going out to tender and construction in 2021, depending on formal confirmation of funding and programming.
“We will be setting up a new working group of Shifnal Town Council members, Shropshire Council councillors and officers and its agents to oversee the project, discuss issues, ensure a full understanding of the management and operational delivery of the project going forward.”
Work is set to commence in Spring 2021 and finish by summer 2021.