The Shifnal Integrated Transport Scheme 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 put forward by Shropshire Council include replacing the Victoria Road traffic lights with a zebra crossing, raising the surface of the road and creating a second pedestrian crossing where Market Place meets Victoria Road.
The project is set to be carried out next year using Community Infrastructure Levy (CIL) funds from nearby developments, but campaigners from the group Shifnal Matters claim the money would be better spent on alternative facilities.
Zoe Turner, Shifnal Matters committee member, said: "Shifnal Matters has undertaken extensive traffic monitoring in the town and can confidently advise that most of the traffic currently passing through this junction is residents within the town, not through traffic.
"Much more detailed data is available and was made known to Shropshire Council.
"The danger to pedestrians on the current traffic light crossing was also notified to Shropshire Council in January 2020 after a succession of near miss incidents.
"It is the view of Shifnal Matters that removal of this crossing and replacement with uncontrolled shared spaces is not a positive move towards pedestrian safety.
"It is understood that the infrastructure spend at this junction is time limited to the end of June 2021. We would still regard that this leaves time to reconsider what changes might serve the town best.
"Shifnal Matters calls for Shifnal Town Council to refer this back to their planning committee for an urgent alternative scheme and for Shropshire Council to truly look at what the residents of Shifnal want and need."
Work is set to commence in spring and finish by the summer.
Shropshire Council has been contacted for comment.