The pedestrianisation of O'Connell Street is back on the agenda.
The street was first closed to traffic in August 2006 but re-opened to vehicles in December 2009.
Funding of €500,000 was provided previously for the project but the scheme didn't go ahead.
However, the Department of the Environment has re-affirmed the money is available.
It also offers a solution as to how the project can proceed.
The Department now says a proposed water mains replacement scheme could be joined with the street enhancement scheme.
Tenders could now be sought seeking a price for both jobs.
The Borough Council previously could not draw down the money as it was waiting for the County Council to carry out the water mains work.
The County Council did not have the required matching funds and so the scheme was stalled.
In its letter to the Council, the Department again links pedestrianisation to the Cranmore Regeneration project.
It stated how the offer of €500,000 was first made in March 2011.
The approval was conditional on full pedestrianisation of O'Connell Street though Borough councillors favoured Sunday only closure.
The Department's letter acknowledge's the current pedestrianisation element "falls far short of what was initially envisaged."
However, it says the proposed new eastern bridge and associated routes will have major impacts on traffic flow in the future.
Traffic will be diverted away from the town centre and "should facilitate greater pedestrianisation opportunities."
The letter also states the current proposal also sought to decouple the project from the water mains works.
However, it goes on to state that in light of the need to retender the water main project it may be opportune to include it with the street works.
By putting both projects together in new tender documentation it would do away with the need for two separate major works in the street.