Visitors will be greeted by a two-storey shopping gallery, replacing the tired-looking shops in the Guild Hall Arcade.

The venue will get a new entrance from Lancaster Road, and the back of the building will open on to a public square, plus a new car park with covered walkway.

And the building, opened in 1972, could also get a new roof to make the whole centre brighter.

Developers Grosvenor and Lendlease will pay for the work as part of their £700m Tithebarn redevelopment.

Jim Carr, chief executive of the council, said: "While there is shopping on the ground floor now, there will be shopping on two levels and the width of the ground floor will be widened so the shops can be taken back.

"There are concepts in about taking the huge glass roof and lining that with a more attractive design over the top of the shopping arcade to create a more attractive, bright environment.

"The lift is going to be takenout and located in a new box office area of the building."

The decor of the Guild Hall and Charter Theatre, which host around 300 events per year and attract more than 100,000 visitors, is already being improved.

A new lounge bar – formerly the Celebrity Restaurant – is due to open in the coming weeks.

Chris Haylett, Guild Hall general manager, said: "The venue does need a makeover – there's no question about that.

"It positions us at the heart of the development.

"It means we get a new entrance right into one of Tithebarn's squares.

"We've got to look at our sustainability through the building process but once it's finished I think it's all very positive for the venue."

In 2006 the Evening Post reported how customers had deserted the 26-unit Guild Hall Arcade.

Shopkeepers said trade was "steady" but they were still uncertain about the future.

Nabila Pervaiz, sales advisor at Varanni Shoes, said the shop was due to relocate to Orchard Street soon.

She said: "It will improve the city centre but it's going to be difficult for the people who are renting out the shops here."

Another trader, who asked not to be named, said: "It's overdue, something needs to be done because of the empty building at the bottom that used to be Morrison's."

Coun Ken Hudson, leader of the council, said he hoped the Guild Hall would be a "premier venue" by 2012, the year of the next Guild.

He said: "All these venues need constant upgrading and they're very, very expensive to do.

"Hopefully, with Tithebarn, we'll be able to bring the Guild Hall into the 21st century."