A clearway is a length of road where a no-stopping restriction applies during peak hours and parking is allowed off-peak.
Civil engineering and infrastructure consultancy Opus is working on the design, which is expected to be finished by January.
NZTA senior project manager Chris Farnsworth said the clearway would "ensure improved safety and usability without significantly reducing traffic capacity".
"Currently the condition, function and traffic volumes on Rotorua's central corridor, Amohau St between Sala St and Old Taupo Rd, deter people from crossing between the town centre and [Central] Mall.
"The option provides a good balance between parking availability and allows for through-traffic by retaining two lanes in the morning and evening peaks, and parking in between times."
The existing left-hand traffic lanes would become a clearway while the existing car parking would be converted into walking and cycling facilities and public space.
Farnsworth said the detailed design would look at traffic management options and the duration of clearways and parking restrictions.
Part of the project would also see the state highway status revoked, making the road a local road.
"The council will then manage the road, the activities beside the road and access from side roads. Ownership and maintenance responsibilities will belong to the council," Farnsworth said.
Rotorua Lakes Council's infrastructure group manager Stavros Michael said a steering group had been established with representatives from NZTA, consultants working on the project design, inner business representatives and Pukeroa Oruawhata Trust as owner of Central Mall.
Michael said the project had three key aims; improved safety for pedestrians, cyclists and motorists, improved aesthetics and connection with the rest of the CBD and maintaining the key central city corridor and main arterial.
At a meeting for the council's Operations and Monitoring Committee, Michael said he expected detailed designs to be complete by January and physical work on the road to start in mid-2019.
"This is an $11m investment that will ensure a significantly enhanced safe environment for our active modes of transport and also make sure we connect Rotorua Central Mall with the rest of the CBD."
Emilyn Dubouzet, the owner of Spa Lodge on Amohau St, said she wasn't aware of the plans for the street but expected them to affect business during construction.
"It will affect business tremendously if there are roadworks going on. It will disturb the normal business."
Dubouzet questioned the need for cycleways and walkways and said not many people used the existing facilities.
She didn't believe new facilities would change that.
Liam Uerata, who works at Rotorua Appliance Services also hadn't heard about the plans.
"I think it [a clearway] is going to affect business because in the afternoon no one is going to want to stop."
Uerata thought having walking and cycle lanes alongside parking could be dangerous for pedestrians as it could reduce visibility.
But Farnsworth said local businesses had been involved in discussions about the clearway as they were part of a key stakeholder group.
"The next step is to finalise the [design] option and the community will have an opportunity to input into this before the project proceeds to final design, tender and then construction."
Pukeroa Oruawhata Trust general manager Peter Faulkner said the trust, as owner of Central Mall, had been involved in the design process from the outset.
He said the changes would be positive.
"There are going to be significant safety improvements but it will also make the ambience of the area a lot better.
"I think it will enhance the flow [from CBD to mall] both ways."
Faulkner said, in the long term, the changes may support the businesses at Central Mall, but it would help the CBD as much as anything else.
