The agreement will see Westminster loan Grosvenor £10 million to improve the public streetscape over a five-year period. At the end of this the firm will pay back the full amount.
Grosvenor is funding the work, which would normally be backed by the local authority, because it will benefit from enhanced capital values as a result. The council will use government grants and business rate returns to offer initial funding.
The agreement is intended to unlock millions of pounds of private sector investment. This will kick-start projects for local residents and retailers, the council maintained.
Grosvenor is proposing improvement schemes at Mount Street in Mayfair and Elizabeth Street in Belgravia, including work on Victoria Coach Station.
The third project is the reopening of Brownhart Gardens in Mayfair. The gardens will be used as a venue for public events.
Architectural and engineering practice BDP is providing landscape design and architectural services on all three projects.
Grosvenor executive director for London Peter Vernon said: "The arrangements represent a key development because they do not place a burden on the council.
"The long-term improvement in the value of our holdings means that we can fund public realm improvements that would normally be borne by the local authority."