The San Luis Obispo County Board of Supervisors unanimously agreed Tuesday to reroute Highway 41 off Shandon's main drag and onto Highway 46 East.
The move removes state control from Centre Street and gives the jurisdiction to the county.
Speed limit changes, the addition of stop signs and crosswalks and flexibility for on-street parking are among the motivators for giving county control, planners say.
County planners are also plotting Shandon's future growth and say the Centre Street corridor needs local oversight to align with its plans.
Details on when the transfer will begin have not yet been disclosed.
The cost for the county to operate and maintain the 1.6 miles of road is estimated at $25,000 annually. But because of recent maintenance roadwork from Caltrans, those costs could be delayed about 10 years, planners say. The initial rerouting work would cost about $2,500, according to county documents.