The project will focus on the area between Dunblane Station and the High Street, and will not only improve the streetscape, but make the area more cycle and pedestrian friendly.
The funding is being provided by sustainable transport charity Sustrans. Stirling Council has said that it will work with the community this year to design plans ahead of work starting in 2015.
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Councillor Johanna Boyd, Stirling Council Leader, said: "This is a great opportunity to improve the appearance of and accessibility to Dunblane town centre for local people, businesses and visitors. It also builds upon the extensive works being carried out by the Council in Stirling city centre and elsewhere."
A steering group of local community representatives has been established to develop ideas and will be organising events to gain the community's views during the year.
(JP/CD)
