The recommendations follow a best value review of the City Centre Management.
Under the proposals, a public/private management board would set up and be responsible for improving and managing the city centre on behalf of the council, major stakeholders and residents. As part of the recommendations, a new jointly funded city centre manager and support staff would also be appointed.
Councillor Bob Scrase, the council's executive member for community, economic development and commercial services, said: "We often talk about wanting to work more closely with partners and the findings of this report point the way forward. Local residents and businesses in the city care about our city centre and the proposed new public/private partnership will help us make improvements."
Andy Hudson, the council's assistant director, environmental protection and street environment services, said: "York was one of the first city's to appoint a city centre manger back in the 1980's and these new proposals will ensure that York remains at the forefront of city centre management.
"The partnership board would have a dual role as a city centre guardian and leader, and as a publicly accountable body, would aim to involve the local community in its development."
Tony Bennett, assistant director for economic development, City of York Council, added: "The partnership would be responsible for developing a business plan for the city centre and identifying 'quick win' projects to create rapid improvements. The aim would be to bring in additional investment to improve services and the quality of the city centre environment, working closely with the tourism industry".
The best value recommendations include the creation of a Shadow Partnership Board, which would then be responsible for creating a formal partnership board by 2004. The shadow board would include representatives from the council and retail and non-retail businesses.
The arrangement would also bring increased investment to the city centre, through the proposed development of a membership scheme and the achievement of Business Improvement District status, which may result in up to £1m additional investment opportunities.