Preparations will start around August this year.
Dundrum locals have expressed their delight after the council announced plans that they were going to start work on a Local Area Plan for the village.
The news was announced by Dun Laoghaire-Rathdown County Council during Monday's meeting with preparation work set to start in the second half of this year.
Local representatives had been calling for the move for years with the main group Imagine Dundrum hoping the announcement paves the way for more green spaces, a "thriving" main street, and a public focal point.
Speaking to Dublin Live, spokesman Tom Merriman said that they hope the move will make people see Dundrum as a "village they can visit and do business in" rather than just for its shopping centre.
He said: "It gives local people, and everybody in fact, an input into the planning and design of the future of Dundrum Village.
"In developing a plan that the local authorities have an obligation to consult with the population - from that perspective it gives us an opportunity to be heard although there's no guarantee that they'll take it on board.