Blackpool Council has carried out the work between Lytham Road and the Promenade after ward councillors Derek Robertson and David O'Hara lobbied for investment to be made.
Cobbles had been laid around 15 years ago as part of an enhancement scheme for the area, but over the years had cracked and sunk in some places.
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Now they have been replaced with a traditional asphalt-type road surface, and all the road markings have been repainted.
Coun Robertson said: "It's a lot better now and the council has done a brilliant job. I think the new surface will last for many years. This is what they should have done from the start.
"It has hugely improved the look of the area and the business owners I have spoken to are very pleased with the work."
A new car park has also now opened on nearby Station Road at the junction with Lytham Road, which Coun Robertson said had also been welcomed by traders in the area.
The site was previously home to the Grand Hotel and Casino, which were badly damaged by a fire in 2009.
Following the demolition of the buildings, the land was surrounded by hoardings for many years until work began last year to create the car park.
Coun Robertson added: "The car park is another welcome addition to this part of South Shore, and hoteliers are saying it is a godsend as it stops people parking in front of their properties.