More from: Atkins reveals Cyprus skyscraper
The first phase of the project will cost £3.8million and will create a major park linking the city's historic Venetian walls to the moat - which will become a 'green belt'.
The Pritzker-prize winner drew up the scheme, which will include new coffee shops, snack bars and newsagents, with colleagues Christos Passas and Saffet Bekiroglu.
Art works will be displayed long the city walls, designed by Venetian engineer Giulio Savorgnamo in 1489, and ramps will lead down to the moat in a 'smooth downhill continuation' of the square.
The scheme also features underground parking and has been designed to respond to a possible reunification of Nicosia, which has been divided since the Turkish invasion in 1974.