Nursery Street could be transformed in the future into a garden terrace, with pedestrianised walkways and perhaps even a park, Sheffield Council's City Centre, South and East Planning and Highways Area Board heard.
Planning officers are in discussions with businesses and bus companies about possible changes to the area now the new ring road is open.
Changes could see buses redirected away from Nursery Street in the future to allow for its pedestrianisation.
Council bosses identified the Wicker and Nursery Street area two years ago as one which could benefit once traffic was redirected.
The eventual improvements, together with the new hotels, offices and residential blocks being built nearby, would attract legal, financial and professional firms to create "a safer, more inviting and accessible gateway".
They describe it "a long awaited opportunity" to extend the city centre back into the Wicker and Nursery Street.
But officers said bus firms were "vigorously against it" as it was a long- standing bus route, although they are in talks about possibly using Stanley Street instead.
Coun John Hesketh said the riverside terrace would be "tremendously important".
He said: "This area has suffered terribly over the years. While some areas of the city have moved on it has stubbornly remained stuck. I think it could be a credit to our city."
The meeting approved the reintroduction of a left turn from Lady's Bridge into Nursery Street for buses, cycles, and taxis.
A right turn from Nursery Street into Lady's Bridge for the same road users was also approved. Both are intended to ease a traffic bottleneck.
New bus lanes will also be introduced on Exchange Place, Exchange Street and Castlegate.
The Wicker area has already been boosted by the news the city's first five-star hotel is to be built by the banks of the River Don in front of the Royal Victoria Hotel.
And the success of the Riverside Quarter nearby has also boosted confidence in the Nursery Street area, which the council say is currently the subject of "significant development interest".
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