The new village square on Balloch Road will serve as the initial development on the project. Pavements will also be widened in enhance space and introduce the possibility for a café culture and seating areas.
Other improvements will be seen to street furniture and signage.
Councillor Iain McLaren, Convener of Infrastructure, Regeneration and Economic Development, was on hand to celebrate the start of construction.
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He said: "This marks the beginning of a very exciting project for Balloch and one that will transform the way it looks and feels to residents and visitors.
"As a gateway to the National Park and Loch Lomond, Balloch already draws guests from all over the world, and the improvements that will come about as part of this project are sure to enhance tourism even further.
"The square is a vital part of this project because I have no doubt that it will encourage community events like markets and performances, and give the village a definite focal point."
Following completion of the village square, phase two will focus on Station Square – a public square at Balloch train station.
The project is being delivered in partnership with Loch Lomond and The Trossachs National Park.
(CM/JG)
