UPDATE: Victoria's RACV has called for the state government to extend the new clearways right through to the Eastern Freeway. This article has been updated with additional. 

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One of Melbourne's most dreaded stretches of road will permanently punt parking spaces in a bid to improve traffic flow around the clock.

Reaching along most of Punt Road, the clearways will extend from Alexandra Avenue at the Yarra River and down to St Kilda, where it will operate from Union Street on the west side and Gladstone Street on the east side.

The clearways will operate on both sides of the road, every day of the week, around the clock, from August 29. Currently, they operate on weekdays only, between 6:30-9:30am and 3:30-6:30pm.

Victoria's Andrews Government confirmed earlier this year that it had been considering a plan to shut out parking along the Punt Road and Hoddle Street corridor. The announcement this week follows "extensive consultation", it said.

"This is a critical north-south corridor that 330,000 people rely on each day and we’re getting it moving," Victorian roads minister Luke Donnellan said.

It is hoped that the change will reduce congestion along the stretch, where the concept of a 'peak hour' disappeared long ago, and also improve safety at points where traffic merges into one lane.

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Three new car parks will open near the intersections of Punt Road with Commercial Road and High Street by the end of December, to help make up for the loss of on-street parking.

The government is also considering extending clearway times along intersecting roads - including Alexandra Avenue, Toorak Road, Commercial Road and High Street - although it says that feedback from residents and business operators is that there should be no change to the current times.

Although welcome, the new clearways don't go far enough to alleviating pressure on a major corridor, according to peak motoring body, the RACV.

"North of the river, traffic congestion is a nightmare also and must be immediately addressed," RACV public policy general manager Brian Negus said.

“Melbourne drivers are fed up with sitting in bumper-to-bumper traffic even on the weekends and in the off-peak. RACV wants the 24/7 clearways to extend all the way from the Yarra River to the Eastern Freeway.

“The Hoddle Street and Punt Road corridor is one of the most significant inner-city arterials in Melbourne, functioning as a by-pass of the city and providing access to many locations in inner Melbourne, like the MCG for example."