Mayor of London Sadiq Khan has set out bold proposals to transform Oxford Street into a traffic-free pedestrianised avenue.

The plans, backed by the new government, would return Oxford Street to being “the leading retail destination in the world,” Khan said today (17September).

He added that he planned to designate a Mayoral Development Area and establish a Mayoral Development Corporation (MDC) with planning powers to provide the framework to bring forward the regeneration.

The proposals will see buses and black taxis re-routed.

Previous attempts by the mayor to implement major changes to Oxford Street were blocked by Westminster Council amid concerns over rerouting traffic, and whose own £90m regeneration plans now look set to be scrapped.

Khan said: “Oxford Street was once the jewel in the crown of Britain’s retail sector, but there’s no doubt that it has suffered hugely over the past decade. Urgent action is needed to give the nation’s most famous high street a new lease of life. I want Oxford Street to once again become the leading retail destination in the world.”

Deputy prime minister Angela Rayner added: “Oxford Street is a world-renowned shopping destination and we want it to stay that way.”

Dee Corsi, chief executive of New West End Company, said the proposals were crucial for the capital’s growth. She added: “The West End is a key driver of the UK’s economy, generating 3% of the nation’s economic output and is central to our city’s retail, leisure, and hospitality sectors.

“The Oxford Street MDC represents a major leap in unlocking its full potential. This revitalisation will not only enhance Oxford Street, but also bring economic benefits to all Londoners and the wider UK economy.

“Given the history of past schemes, it is essential that we move swiftly to deliver this project.”

As home to numerous flagship stores including Selfridges and John Lewis, Oxford Street receives more than 500,000 visitors per day and generates around 5% of the capital’s economic output (GVA), the equivalent of £22.75bn.