Cars, taxis and all other vehicles except buses and bikes will be banned during weekdays at Bank Junction in an experimental scheme from next April.
From Monday to Friday between 7am and 7pm only cyclists, pedestrians and buses will be able to move through the junction, which has become one of central London's most notorious traffic and cyclist danger spots.
The 18-month trial could cut casualties by 50 to 60 per cent a year, the City of London Corporation said, as around 75 per cent of collisions occur between this time.
Chris Hayward, chairman of the City of London Corporation's planning and transport committee, said:
Our number one priority for this work at Bank Junction is to improve safety and reduce casualties.
At the moment, Bank is too clogged full of traffic, confusing for road users and not really a place that people can enjoy, when it really should be, as one of London’s most iconic places.
We will run a formal public consultation next year and a final decision on whether the scheme is to be made permanent will be made when we assess the success of this scheme.
The City of London Corporation gave the scheme a green light today with a 22:1 vote.
The City of London Corporation said it has worked closely with Transport for London (TfL) to ensure the surrounding roads will not be overstretched by re-routing and that taxis are still able to "trade effectively" in the City.
Journey times for vehicles in the area, it said, will be "improved or at least maintained".
A series of protests by cyclists were triggered last year after a 26-year-old Oxford graduate, Ying Tao, was killed by a truck at Bank Junction as she was cycling to work at PwC.
Bank is London’s third busiest Underground station, with more than 100,000 passing through in the morning between 7am and 10am.
At its busiest hour at 8am, there are more the 18,000 people cross the junction on foot, 4,500 people travelling by bus and 1,600 people travelling by motor vehicles – which is equal to the number of cyclists.