Strathbogie Shire Mayor, Cr Chris Raeburn, said while the marquees were closed it was safe for traffic to return to the 40km/hr speed limit.
However, when tourism and visitor activities again increase in March, and the Go Dine marquees reopen, traffic will again be reduced to 20km/hr along the 600m section of High St.
"When the marquees are open, we need to ensure our community and visitors to Nagambie are safe," Cr Raeburn said.
"We've worked closed with the Department of Transport to ensure the best possible traffic management plan.
"For Council the safety of our community is paramount."
The three marquees in the centre grassed median strip of High St were initiatives funded through the Victorian Government's Outdoor Eating and Entertainment Package.
Council received $250,000, with the direction from government that it could be passed on to hospitality businesses in the form of reducing or waiving permit fees or invested in infrastructure.
Currently, the marquees in the Go Dine precinct are looked after by The Royal Mail Hotel and Zephyrz.
Go Nagambie Executive Officer Sissy Hoskin said Go Nagambie had supported local hospitality businesses to safely expand their outdoor dining during the COVID-19 pandemic.
"The Go Dine precinct was established to support local hospitality traders and it's been great to see locals and visitors enjoying them," Ms Hoskin said.
"During March there are several events in Nagambie that will draw an increase in visitation numbers. These will include the labour day Long Weekend (March 6-8), NOW Festival (March 6) and Go Fish Nagambie (March 26-28).
"The Go Dine precinct will re-open to cater for increased visitors to Nagambie and the surrounding region.
"We will continue to monitor the changing COVID-19 situation with council and use the marquees when required to assist with safe social distancing and open dining measures as directed by the Chief Health Officer."
