However, the council's utilities committee baulked at the proposed cost when the upgrade scoping report was tabled earlier this week.
Councillors allowed the project to progress to the concept design stage as recommended, but resolved that it return to the committee for further approval before construction was programmed.
Cr Cath Gilmour, on the committee for the first time, said she was "uncomfortable" with the proposed cost.
Cr Vanessa van Uden said it was a "horrendous amount of money" for three streets and would not support the project going to the concept stage.
Cr Gillian Macleod asked if streetscaping would be limited because of the Church St underground car park.
A consortium of Queenstown investors and the GW Property Group from Sydney was behind the retail and office building development on Church St.
Cr Mel Gazzard asked if there was a way for council staff to work with the developers when upgrading the west side of the street.
QLDC transportation planning manager Denis Mander reported that the block between Church and Earl Sts was almost fully commercial and the retail-office development between Church St and Searle Ln was due to be finished early next year.
Mr Mander reported the proposed block upgrade would carry out "much needed pavement rehabilitations" and "maximise" footpath widths; improve off-street walkways, including to Marine Pde Reserve; reduce severance caused by the carriageway; and consider seal upgrading, lighting and the need to future-proof services.
On the streetscape, existing features would be enhanced. There would be plantings, and reductions in signage.
Traffic speeds would be lowered for pedestrian safety, and the reduction in parking would be minimised.
A study predicted a sharp increase in employment in Queenstown's central business district in the next two decades, from 180 jobs in 2006 to 1161 jobs in 2026, with an increase of associated higher pedestrian and vehicle traffic.
Survey and pavement testing was expected to be done by the end of February, with concept design, consultation and funding approval from Land Transport New Zealand in the first quarter of 2009.
Church St construction was timetabled for 2009-10 and works on Earl St and Marine Pde for 2010-11.
The proposed works would cost $4,187,448, of which $298,669 was earmarked for Church St pavement improvements.
The total cost included major service relocation, which could be mitigated during the design phases and would be offset against utility renewals and upgrade projects.
Searle Ln works would be funded by other council budgets.
