Under the plan, trucks over 15m long will be redirected to alternate routes, to reduce traffic congestion in the Adelaide Hills town, which attracts thousands of visitors each year.

Signs advising drivers of the change will be installed by early November.

Exemptions will only apply if the truck is taking freight to a business on Hahndorf's main street, or to a destination that cannot be reached by any other route.

Once implemented, the ban is expected to clear the road of almost all large heavy vehicles, which will be diverted to alternate routes including River Rd and Strathalbyn Rd.

Both River and Strathalbyn roads will be upgraded to take on the extra traffic. Improvements to River Rd will include shoulder sealing and tree trimming, along with intersection improvements at Kangaroo Reef Rd, Sawmill Gully Rd and Fairview Rd.

Upgrades to the Strathalbyn Rd/River Rd and Mount Barker Rd/River Rd intersections are also planned, along with works including shoulder sealing and tree trimming at locations along Strathalbyn Rd.

The news follows a recent announcement that Heysen Boulevard in Mount Barker will receive a new rail level crossing.

The South Australian Government and the Mount Barker District Council have agreed to jointly co-fund the $5 million works, which will join two sections of Heysen Boulevard currently separated by the SteamRanger railway line.