There are also plans to move the pedestrian crossing from its current position close to the junction at Croft Lane to nearer the junction with Welton Road.
There would also be new lights at the junction in front of the Crown Bar.
Councillor Caroline Shiers is delighted with the news.
She said: “This is a fantastic development for Blairgowrie and one which will also benefit the wider Blairgowrie area.
“It is one of the most significant improvements to transport provision in this area in many years.
“The improvements will make the Wellmeadow a real transport hub for the whole of East Perthshire. The proposals also improve pedestrian safety and recognise the need to get cars moving more freely in that part of the town, which will improve access to the Welton Road Industrial Estate and the car park next to the Co-op.
“There will be disruption while the works are carried out but in the long term this will have a very positive benefit and it will be money very well spent.”
The upgrade work is being funded in part by money from the Town Centre Regeneration Fund from the Scottish Government, which is also funding the new community facilities at Rattray Primary School and the work in the Wellmeadow itself and the Riverside area. The rest of the money is coming from Tactran.
A spokesperson for Perth and Kinross Council said: “We are presently working on the design of our proposals for the Wellmeadow bus stop area and intend to carry out community consultation in the latter part of January.
“Details of the consultation arrangements will be confirmed early this month.”