Member for Lyne Dr David Gillespie last week announced federal funding for the project.

Port Macquarie-Hastings Council secured funding of $800,000 towards a $1.6-million upgrade and beautification plan.

Council said the remainder of 2019 will be used to complete design, environmental approvals and community engagement.

Construction is expected to commence in 2020.

The improvement works are expected to capitalise on the planned population growth for the area, outlined the council's Urban Growth Management Strategy 2017-2036.

That documents indicates that some 5500 new residents will flood into new sub-divisions west of Lakewood Shopping Centre through to Kew and Kendall.

Kew business group's Peter Newman says the local business community has a "real vibe about it".

"It is a small village but everyone has a very positive outlook and this funding will make a significant difference," he said.

"This is a great outcome.

"Along with the safety and beautification measures, the project will see more functionality in regards to parking near the Kew Store.

"It also includes creating a meeting place for residents and visitors where they can catch up."

Mr Newman said studies indicate that as you make an area more attractive it has a calming influence over traffic movements.

That is important for the Kew intersection given the amount of traffic it carries.

"It (the intersection) is very busy. Our figures show that on average one vehicle passes through that intersection every 5.6 seconds between 5am and 6pm on Monday to Friday," Mr Newman said.

"And these are not just local traffic movements.

"Many tourists pull off at the iKew Centre before continuing either north or east to travel to Port Macquarie.

"Kew's main street is considered the gateway to Port Macquarie from the south. Any improvements to signage, traffic management, pedestrian access is important."

Dr Gillespie joined residents, business owners and representatives of Port Macquarie-Hastings Council to detail the works.

"This project aims to provide improvements to beautification, parking and functionality as part of council's Kew Main Street Plan which was developed in consultation with a very active local community and Kew Business Group," Dr Gillespie said.

"When council submitted their application seeking funds to help get this project off the ground I was happy to lobby the minister, and I'm delighted to announce funding has been secured."

The Port Macquarie-Hastings Urban Growth Management Plan identifies that population growth in the Kew area will be strong, impacted by growing population areas to the west in Kendall and the Lorne Valley and from additional land to the east zoned for residential purposes, only 800 metres from the main Kew town centre.

Kew is the southern gateway to the Camden Haven and a gateway for many tourists travelling west to the picturesque hinterland of Comboyne and beyond.

"I'd like to take this opportunity to congratulate council on their successful application and thank local residents and business owners in supporting me lobby for these funds," Dr Gillespie added.

Work on Kew's Main Street upgrade started a decade ago once work started on the highway bypass.

Council completed the Kew Main Street plan and some initial works were completed, including the removal of street lights, installation of the roundabout, tree planting and some safety measures.

Around two years ago the business group revisited and updated the plan.

The group continued to discuss the plan with council before successfully applying for the federal funding.

"Because the business community and council had completed all the preliminary works, we were shovel ready to go," he added.