The narrow laneway in front of Woolworths is to be made one way, it was decided at the recent meeting of the Cootamundra-Gundagai Regional Council.
Traffic movement will be limited to the southerly direction, entering Parker Lane from Bourke Street near the taxi rank and exiting into Wallendoon Street, at the Ex-Servicemen's Club end.
A speed limit of 10km/h will be requested from Transport for NSW, and Woolworths will be asked to to redesign the carpark.
The measures will not come into effect immediately, but will be further considered in November.
The proposals have been made in view of the "unpredictable and frequent pedestrian movements" down the lane, with many pedestrians disregarding the crossings.
The chair of the local traffic committee, Councillor Charlie Sheahan, said the the switch to one way would provide a better traffic flow and improve safety for pedestrians.
He said there had been extensive consultation with businesses and the community, with "surprisingly" strong support for the move.
A survey by the council's road safety officer, Andrew Carrol, had shown businesses were 14 in favour and two against, with a further one having no preference and one non-return.
"On top of that the traffic movement was measured, showing 70 per cent going in that southerly direction, from Bourke Street to Wallendoon Street, so that was the natural movement of vehicles," Cr Sheahan said.
The council will ask Transport for NSW to investigate the suitability of implementing a 10km/h shared pedestrian zone.
Cr Sheahan said the local traffic committee also recognised there would be design issues in the car park itself.
"Issues arise if a driver wants to move from the southern parking area to the northern parking area," he said.
"This would require you to go against the flow of one way traffic, so we will be investigating that further in consultation with Woolworths."
Council agreed to consult with Woolworths regarding the exit design and the proposed changes to traffic, and submit a design for traffic flow within and around the car parking areas to be reviewed by the committee in November.
The local traffic committee also proposes to make the rest of Parker Lane one way, between Adams and Bourke Streets, running past the rear of the IGA supermarket.
However this will not be decided until after consultation with businesses along that section of the laneway.
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