The funding will pay for altered roundabouts and 18 new zebra crossings in the CBD, to be rolled out with the speed limit reduction.

The 40km/h zone will be bordered by the railway line, Myrtle Street, High Street, View Street and Chapel Street, and includes Gaol Road and Park Road.

Related: City applies for funding to make road safety improvements in the CBD

A new pedestrian crossing will be installed on View Street in front of the Bendigo Art Gallery where a break in the median strip already exists.

The roundabout at the intersection of Mundy Street, Hopetoun Street and Lyttleton Terrace will be tightened to slow traffic, and new raised zebra crossings will be installed at each of the five entrances.

More raised zebra crossings – which are designed similar to speed humps – will be added at roundabouts on Edward Street, and at the roundabout at Hargreaves Street and Mundy Street.

The works will begin later this year.

City of Greater Bendigo mayor Margaret O’Rourke said the changes were designed to cater for increased pedestrian and cyclist traffic in the centre of Bendigo.

“The amount of people that come into our city centre, whether it be by car, bike or pedestrian, is increasing,” she said.

“We want to be able to enable all three modes of transport to be able to use the city safely and we think this is a way of doing that, to improve that.”

Modelling from the TAC estimated the changes would see a 30 per cent reduction in crashes in the CBD.

Between 2011 and 2015, there were 28 crashes in the CBD resulting in 16 serious injuries for pedestrians.

Cr O’Rourke conceded that some motorists would take exception to the changes, but described them as necessary for a growing city.

“It’s about safety first,” she said.

“Whether you’re in a car, whether you’re on a bike or whether you’re a pedestrian, it’s about the conditions for the community.”

Cr O’Rourke hoped the zebra crossing on View Street would cut down the number of people J-walking in the area, particularly on weekends, when the art gallery sees the most foot traffic.

Roadworks will begin on the roundabouts on Edward Street first.

The Lyttleton-Mundy-Hopetoun roundabout will be next, and will require the largest amount of funding. The area could experience significant increases in traffic in the coming 10 years, as plans progress to develop a “GovHub” in the CBD to combine government departments based in Bendigo.

Member for Bendigo West Maree Edwards said the prediction of 30 per cent fewer collisions was not “out of the blue” but was based on “serious modelling”.