The big, red terrasse — called la Grande terrasse rouge in French — will be set up this summer, ahead of the work scheduled to begin in September.
The work is expected to end in November 2016.
The city has promised to keep 180 parking spots on the street and relocate another 80. It has also promised to make space for pedestrians to walk around, and to clean the work site every day.
Work crews will improve lighting, replace the sewer system and rebuild sidewalks. The work is expected to cost $14.4 million, with $4 million of that going toward helping businesses weather the major construction.
The terrasse initiative is part of a new financial aid program to help reduce the impact construction has on stores and restaurants in downtown Montreal.
"In the past, we heard that there was no effort on the part of the City of Montreal to help business owners," said Lionel Perez, who is responsible for the city's infrastructure dossier.
Some business owners remain skeptical. Julie Peneau works in a boutique on St-Denis Street and said she still thinks people will opt to shop and dine elsewhere to avoid looking at ugly construction work.
Perez said the bulk of the work will take place in 2016.