The project was announced by Social Development Minister Margaret Ritchie last week, and follows on the heels of a similar scheme successfully underway in Belfast.
The Coleraine project will see the main pedestrian surfaces of Church Street and Kingsgate Street replaced.
Existing street furniture, such as seats and litterbins, will also be replaced. Integrated lighting will be introduced with the erection of street lighting columns.
Minister Ritchie said: "This is good news for the residents of Coleraine. As Social Development Minister I want to create attractive shared spaces in our towns and cities where people feel safe together.
"This much needed investment will not only see the centre of town greatly improved, but will also help to create a neutral, vibrant and distinctive people-friendly public space."
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"It builds on the work already carried out around the Diamond area and complements the two major redevelopment schemes that my department is promoting on the Abbey Street and Mall car parks," added Ms Ritchie.
Over £1 million of the budget has been granted by DSD, with a £66,000 contribution from Coleraine Borough Council. The Roads Service is to provide £25,000.
The Mayor of Coleraine, David Barbour, welcomed the town centre improvement scheme: "These are stimulating times for Coleraine with development schemes in the town and now a substantial environmental improvement project."
"The physical environment is the visible expression of a town and helps determine its image - it is essential therefore that Coleraine presents an attractive and inviting picture, both to the satisfaction of the local community who want it to reflect their pride in their town and for the many visitors who holiday in the area."
"This public realm scheme is also being delivered to encourage a hub for future prosperity. I congratulate the Department for Social Development on their investment in the project," added Mr Barbour.
The Mayor also paid special thanks to Chair of the Coleraine Town Partnership Ian Donaghey.
Mr Donaghey said: "The way a town centre looks and feels is vitally important for its success. We believe that the new scheme for the centre of Coleraine will create a safe, high quality environment that will be attractive to businesses, shoppers and visitors."
(PR/JM)
