The 1.5 billion yuan (USD 243 million) project involved upgrading the sewage system, water supplies and electric lines, along with the preservation of old-styled buildings, Che Zala, secretary of the Lhasa municipal committee of the Communist Party of China said at a ceremony.
"The project has enhanced protection of Tibetan cultures, improved the old city's infrastructures and lifted the living conditions there," he was quoted as saying by the state-run Xinhua news agency.
Covering an area of 1.33 square km, the old urban areas of Lhasa centres around Barkhor Street, known for its bustling businesses and cultural activities, and the Jokhang Temple, one of the major monasteries in Tibet and a World Cultural Heritage site.
The street has had several renovations since the 1980s. In 2002, a 170 million yuan project saw the road paved with granite, as well as fitted with new water and electricity facilities.
To solve complaints over the poor infrastructure and to protect the historical buildings in the area, the city government launched the renovation project in December, after winning support from 96 per cent of the residents, the report said.