The decision was made through the Procurement Board.
The £3,896,590 works will transform a section of Chapel Street on the Bee Network including the junction of Chapel Street and New Bailey Street, which is the final phase of the New Bailey Gateway project.
Improvements will also be made to Chapel Street between New Bailey Street and Blackfriars Street as part of the Chapel Street East Phase 1 project.
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Salford City Mayor Paul Dennett said: "It is fantastic news that this contract has been awarded so works can begin soon.
"The works are part of a long-term plan for the city centre which is designed to make it safer for pedestrians and cyclists with better road crossings and cycling provision.
"Public realm improvements will also support the wider regeneration of the area to make it a much more attractive area for people.
"The approval also means that the contractor will use local suppliers and subcontractors where possible. Staff will use volunteer hours to be spent at local school and college visits with extra support for getting young people aged 16 to 24 into work. There will be work placements as well as staff volunteering hours on community projects.
"The artists impressions of what the scheme will look like when finished are very impressive and I can’t wait to see works finished and open for everybody to use."
The scheme will use a ‘complete streets’ approach to rebalance the space in favour of pedestrians and cyclists while also catering for buses, general traffic and loading.
