The Jewellery Quarter Regeneration Partnership (JQRP) has proposed more public spaces, expansion of the Big Peg building and better infrastructure links to the city centre.
Planning guidance, which has seen the quarter subject to strict zoning, will also be reassessed to tackle the 100 or so empty buildings in the area.
JQRP operations director Andy Munro said that although zoning has ensured that small businesses are not forced out by rising property prices, several buildings are in a "bad state".
"We're at a crossroads and we need to reassess how the guidance is working," Munro added. He stressed that the plan would also tackle the area's "uninspiring and mediocre" architecture.
Regional development agency Advantage West Midlands has pledged £5 million to the scheme, with a further £7 million in the offing from a range of partners including the Heritage Lottery Fund and Birmingham City Council.
Council cabinet member for regeneration Ken Hardeman said the local authority is "committed to securing the long-term future" of the area and added that the area has huge tourist potential.
