The draft proposal, which local authorities hope will cement Bondi's status as a world-class tourist destination, will see large areas of the foreshore currently devoted to parking turned into green space.
The Bondi Pavilion, a beachfront arts and cultural space dating back to the early 1900s when it housed Turkish baths and a ballroom, would also be restored as the "grand entrance" to the beach under the 10-year plan.
"Bondi Beach is Sydney's third-most popular attraction, after the Opera House and Harbour Bridge, so we have reached for the sky with this bold plan," said Waverley Council mayor Sally Betts.
"We were conscious of preserving Bondi's heritage and character while finding ways to enhance and boost its cultural vitality".
Bondi attracts an average of 2.2 million visitors every year - 1.1 million of them from abroad - with almost half of all international tourists to Sydney making the trip to the renowned one-kilometre stretch of surf and sand.
It is most popular with British, Chinese and American visitors according to the New South Wales state tourism authority.
Betts said the overhaul, which will be open for community comment until the end of May, would see a large area of the beachfront become pedestrian-only, with a new boardwalk, waterfront cafes and beach volleyball courts.
New car spaces would be dug underground and parkland established over the top, increasing green space by 15 percent, with a tree-lined boulevard leading to the Pavilion which will serve as a gateway to the beach.
"There are so many different reasons people come to Bondi and love Bondi, and we have tried to balance those varying uses and needs," said Betts.
Bondi, which takes its name from an Aboriginal word meaning the sound of breaking waves, lies seven kilometres from central Sydney.