A new detention basin is being constructed to reduce flooding in the town's CBD during storms.

It's the first stage of significant stormwater mitigation work by Parkes Shire Council worth $2.7 million, taking place in what is known as Croaker Park which is located next to Pioneer and Spicer ovals.

Residents would have also noticed upgrades to Victoria Street's drainage system which is part of the work.

The basin will capture and manage overland flow from the surrounding catchment to mitigate the flooding in the CBD.

Surface works will also be done to direct water into the new basin, such as improving the entry points to Northparkes and Pioneer ovals, as well as reshaping the access road at Spicer Oval.

The Victoria Street roadworks will redirect stormwater away from the CBD and towards Bogan Street.

There will be further drainage works at the intersections of Currajong and Clarinda streets in Victoria Street.

"These works will form the first stage of works resulting from a storm development control plan for this urban area and will significantly improve the localised flood protection for this area, and help reduce the impact on the local drainage system," council said.

Water, sewer, power and communications services have been relocated to enable the construction and Croaker Park will be restored and rehabilitated once the works are complete.

The project is expected to be finished by 31 December.