The Walter Burley Griffin Award for Urban Design, presented by the Australian Institute of Architects, has been given specifically for the works completed to the Princes Highway section of Lonsdale Street.
Running through the south east of the town, new shops, private developments and tree lined paths are now where cars used to reign unabated.
The lead architect of the works, Simon Knott, explained:
"It was replanted and essentially turned from a car-dominated state highway along Lonsdale Street into a pedestrian-focused accessible area."
The work, which it is hoped will attract higher numbers of shoppers to the area, has also made significant improvements for cycle traffic. It is also hoped it will develop further into a residential urban area.
The project is part of far reaching plans to redevelop Dandenong, which has already cost nearly $500 million. The entire plan will cost about $1 billion.
Awarding the honour for the improvements made so far, the Australian Institute of Architects said that the team behind the Princes Lane project had created an area which was an:
"engaging pedestrian realm"
Hit by the high profile closures of key industries in the area in recent years, with the withdrawal of General Motors Holden and Heinz most notable, the redevelopment plans are intended to give Dandenong its pride back, attract investment, and kick start the economy.
Investment is already coming in, with three private developments already confirmed for the area.
Commencing in 2007, the complete project was given a timescale of between 10 and 20 years.