A number of on street parking bays would be moved.
The work is being funded through a mix of active travel funding, to boost walking and cycling, and the Government’s Towns Fund - a pot of cash awarded to towns across the country in need of regeneration.
Shipley could eventually see projects worth £25m funded through the scheme.
The Council has said: “This would help to reduce traffic along this route, reducing noise and air pollution, and improving bus journey times.
“Reducing the volume of vehicles in the Kirkgate area will also help to provide a safer, cleaner and more vibrant environment for everyone to enjoy.”