Lord Mayor Sally Capp said the new smoke-free area on Bourke Street, between Elizabeth Street and Russell Place, would take effect from Friday 4 October, as part of the City of Melbourne's commitment to protect people from passive smoking.
"Smoking takes a terrible toll on our community. Every year about 4000 Victorians die from smoking-related illnesses, and it affects the health and wellbeing of thousands more," the Lord Mayor said.
"There is no safe level of exposure to smoking. That's why we're clearing the air for the 60,000 visitors, residents and workers who enjoy the shopping and fantastic atmosphere of Bourke Street Mall every day."
People City portfolio chair Cr Beverley Pinder said there was widespread community support for the ban.
"We're delighted that the community has embraced making our iconic Bourke Street Mall a more welcoming and healthier place for everyone to enjoy," Cr Pinder said.
"There is enormous community support for this move, with 83 per cent of the 3000 people and 160 traders surveyed supporting the ban, and two out of five smokers saying it will encourage them to quit.
"This is about improving health and wellbeing for everyone and we've consulted with a range of stakeholders including universities whose students use the area, the Council for Homeless Persons, buskers, VicHealth, and Quit Victoria."
The ban does not currently include e-cigarettes, also called vaping. However, Council will review the local law to consider also banning vaping in smoke-free areas.
This would bring the ban into line with the Tobacco Act, which bans smoking and vaping in places such as outdoor dining areas.
Quit Victoria Director Dr Sarah White said the City of Melbourne's initiative was in line with community expectations and likely to be followed by other councils in Victoria.
"We get quite a few inquiries from traders, members of the public and local government staff asking how amenity and safety can be improved in public spaces. I would be very surprised if the City of Melbourne's move wasn't adopted by other councils," Dr White said.
"It's important to note that people who are trying to quit find smoke-free spaces incredibly helpful. Quitting can be hard for some, and not having the smell of cigarette smoke and the sight of people smoking around can really help people trying to quit to stay on track.
"This is a great opportunity for people regularly in the Bourke Street Mall to call the Quitline on 13 78 48 for advice and support and take advantage of the new laws to have a go at quitting."
As well as the new Bourke Street area, there are 10 other designated smoke-free areas within the municipality, including Goldsbrough Lane, QV Melbourne, The Causeway, Howey Place, Equitable Place, Block Place, The Tan running track, Princes Park running track, Collins Way and Fulham Place.
Smoking is also banned in outdoor dining areas under State Government laws introduced in August 2017.
The fine for smoking in a smoke-free area is $100. People found littering cigarette butts anywhere in the city face heavier fines: $330 for an unlit butt and $660 for a lit butt.