The decision was taken at a meeting chaired by Chief Minister Sheila Dikshit and attended by Union Minister Kapil Sibal who represents Chandni Chowk in Lok Sabha. Senior officials of various departments and agencies were present in the meeting.
The project includes having an integrated plan for all the services and creating a "heritage environment" on the stretches of Chandi Chowk.
Sibal requested Dikshit to ensure early start of work.
The meeting decided to give responsibility of maintaining roads above 60 ft width to PWD which are currently under municipal corporation.
The power department and private discoms have been told to put all the power cables underground.
Dikshit said re-development of Chandni Chowk was priority for her government and a coordination group has been constituted to overcome any obstacle coming in the way.
"All agencies have been told to work in tandem to ensure completion of work at the earliest," she said.