The signals at the junction of Norfolk Street and Horncastle Road are reaching the end of their life and need to be replaced.
The improvements are due to begin on Wednesday, August 14 and are expected to be completed by Friday, September 13.
To allow the works to be carried out safely, Norfolk Street will be closed to all traffic except pedestrians and cyclists during the school holiday period, with two-way temporary traffic lights on Horncastle Road.
Following the school holidays, Norfolk Street will be re-opened and three-way temporary lights put in place on Horncastle Road while the project is completed.
Access for residents and to businesses will be available at all times.
During the works, there will be a temporary pedestrian crossing on Horncastle Road near Hospital Bridge.
Anthony Gent, principal engineer traffic signals, said: “The new signals will be easier to maintain and much more energy efficient, saving on annual running costs.
“There will be some disruption while the work is carried out, but we hope to minimise this by carrying out the majority of the project during the school holidays, when traffic is much lighter.
“To avoid future disruption, we’ll also be taking advantage of the closure to resurface the section of Norfolk Street between Horncastle Road and Grand Sluice Lane.
“In addition, we’ll be carrying out other minor repairs and cleaning out the gullies.
“We apologise for any inconvenience caused in advance, and advise motorists to leave additional time for their journeys.”
For more on roadworks taking place across Lincolnshire, visit www.lincolnshire.gov.uk/roadworks