The 10-phase scheme for property developer Reef Group includes building refurbishment, the creation of new shops and toilets and a revamped car park.
Midas Construction has begun pre-construction works on site and is due to complete the first phase of the project in autumn 2020.
The project is linked to Gloucester City Council’s regeneration plans for the wider King’s Quarter area, with a new hotel as well as residential, retail and office space.
Midas Construction director Derek Quinn said: “King’s Walk is one of the main gateways into the city, so it is key to the area’s future economic prosperity to be developing vibrant new spaces for businesses, visitors and the local community to thrive.”
Gloucester City Council leader Paul James said: “This is one of the first steps in regenerating the overall Kings Quarter area of the city centre which, together with major improvements planned for Kings Square, will bring huge economic benefits and investment opportunities to Gloucester. We’re looking forward to seeing the improvements at King’s Walk and creating an exciting and modern place for people to shop, eat, work and visit.”