The public realm scheme will see the town centre undergo a massive redevelopment project, similar to those in Belfast and Derry.
The plans include the re-alignment of roads, upgrading of footpaths, increased lighting and street furniture, spanning across most of the town centre.
Minister Ritchie said: "Following a period of consultation with the people of Downpatrick, the council and Roads Service, the scheme being announced today will see major changes to the public realm in Downpatrick town centre, making it more appealing to residents, businesses and visitors.
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"This major investment of around £3 million is designed to target areas that are currently perceived as unattractive and has the potential to act as a catalyst in reinvigorating the town centre to improve trading conditions and encourage private sector investment in Downpatrick."
The project is being implemented by the Department for Social Development's Regional Development Office, in partnership with Down District Council and the Roads Service.
Public consultation on the plans will begin during October with work expected to start early in the New Year and to finish by March 2010.
(PR/JM)
