The alley has even been given a new name, Theatre Walk, as it connects Chorley Little Theatre with the town centre.
There is new paving and an archway to the alley, which sits between Peter Street and Market Street.
Ian Robinson, chairman of Chorley Little Theatre, was pleased with the outcome.
He said: “The alley looks fantastic and we’re honoured the council named the new walk after us, so would like to thank them for all their support.
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“We’ve been here 107 years but incredibly there are still some people who’ve not discovered us. They’ve got no excuse now!”
The work has been commissioned by Chorley Council as part of a £4million project to improve the public realm in the town centre.
Councillor Alistair Bradley, leader of the authority, said: “Improving the public realm is an important part of the redevelopment of the town centre to attract more visitors and boost the local economy. Theatre Walk looks fantastic and it will help to signpost people to Chorley Little Theatre, which is a popular town centre attraction.
“The ultimate aim is to create a much more vibrant town centre to add to the already great appeal of Chorley.”
Theatre-related quotes line the paving and notice boards will soon be installed along the walls to tell people what is coming up at Chorley Little Theatre.
The notice boards will be accompanied by Peter Wink street name plaques at either end of the alley to recognise the fact that many local people know the alley as that name.