The project will relocate gas lines and replace water lines on a stretch of Live Oak Street starting immediately east of Hutto City Hall and continuing to Fritz Park.
After the utility installation is finished, the city will repave that same section of Live Oak Street.
The project, including the repaving, is expected to be complete by summer 2022.
Live Oak Street has drawn frequent complaints because of its uneven pavement.
"Live Oak is our main artery for Old Town," Council Member Mandi Villarreal Salvo said. "Community members have reached out to me. ... Their bumpers are falling off because they get stuck in the crumbled pavement. I mean, it's a mess."
Funding for the $336,000 project will come out of the city's general and utility funds.
The city will also conduct an analysis of all the streets in Hutto to determine where else pavement replacement and repairs are necessary, then use the information gathered to develop an annual street maintenance plan, according to a city presentation.
