Forty-four platanus orientalis "autumn glory" trees will be planted in their place.
The trees will be about 4 metres high and will grow to a mature height of about 10m.
They will have high canopies and will be of the largest grade possible for quick growth and development.
Their locations have been selected to help with the integration of the new square with Perry St and Cole St.
Assets and operations manager David Hopman said the details of a koru design, which will feature on the ground, were to be agreed on by iwi.
Masterton Mayor Garry Daniell was confident the new trees would add a great deal to the town square.
"Chapel St has seen a considerable upgrade over the last few years and this is another notable embellishment, which will make State Highway 2 through Masterton even more appealing," Mr Daniell said.
The council also unanimously passed a recommendation that a pay and display machine be installed in the new town square carpark.
The machine would cost $8800 and the time limit and hourly rate will be the same as in the central business district.
Mrs Southey said: "It's an opportunity to have that earn us some money from parking, and it's also probably quite a good trial for pay and display use in Dixon St."
Most of the funding for the project has been independently secured by Mr Borman, who produced a plan drawn up by architect Daryl Silverwood to transform the bitumen carpark, between the Wairarapa Times-Age building and the town hall, in February this year.
Last month, a concept plan and budget of $660,000 for the new town square project, which will include expanses of green space, pavings, walkways and a prominent water feature, was unanimously approved by the council.
Councillors also unanimously agreed to commit $85,000 towards infrastructure such as security, lighting, underground power, carpark re-seal and diesel tank removal.
