The supermarket giant is offering Liverpool City Council £600,000 to improve Park Road in Dingle.
The council's cabinet is holding a meeting on Thursday 28 April to approve the funding, which is part of a Section 106 planning agreement and Tesco's plans to open a new store in the area on 16 May.
The council said traders will also be given the opportunity to apply for a further grant of up to £2,500 to improve premises, providing they match the funding.
Overall, it is estimated that the funding will be worth up to £15,000 for each business on Park Road.
In a revised application, Tesco said it is committed to helping surrounding businesses as part of its plans.
Lorraine O'Brien, a local trader who has run Park Road Discounts for 20 years, said: "Over the years I have seen many changes but this is by far the best thing that's ever happened to the area. A lot of facilities such as the post office have been taken away, so we needed something to attract people back to Park Road.
"The new zebra crossings will make it easier for people to get to the shops and the plants and new signage make a huge difference to the look and feel of the area. I am really excited about the future of Park Road."
The council added that Tesco has employed more than 100 people from area for the new store.