Contractors would move in between 7pm and 2am every night to minimise the impact on business under proposals by Edinburgh City Council.
Bus routes would also be kept clear to prevent delays along the busy route into the city centre.
However, residents are concerned about the noise and floodlights required to do the work.
Contractors are currently being sought for the £5.5 million project, which will include major resurfacing of roads and pavements damaged by the axed tram route.
No timeline has been released yet but the work will run for an estimated 18 months and also include improvements such as the returning of statues, including the Sherlock Holmes monument.
Residents also want to see trees and benches added to improve the look of the area.
The council was quick to point out that the decision to push ahead with night-time works was for the community to make. If locals do back the proposal, guidelines on noise would be closely adhered to, it added.
Despite the assurances, some residents said the nature of the work was such that noise could not be avoided.
Tracy Griffen, 38, who runs her own fitness studio above her Leith Walk flat, said: “I live and work right next to Leith Walk so I get no escape from it if it goes ahead.
“During the last round of works, I had to ring up the customer care people to complain when there was work on before 7.30am but there doesn’t seem to be any connection to the workers on the ground. I’m worried the same thing would happen again.
“I realise what suits the businesses might not necessarily suit residents and I guess it will be a discussion we will have to have.” She added: “There were some late-night roadworks where my friend lives in Inverleith and she didn’t sleep a wink for weeks.”
Alan Rudland, spokesman for the Leith Business Association, said the move could grant a reprieve for traders who had suffered as a result of the previous works.
He said: “From a business perspective, the 7pm to 2am works would be a good move but we realise we are not the only stakeholders and we need to look at the bigger picture.
“When it comes to the tram project there is often this drive to get it finished as quickly as possible. We’ve been through that before and we saw what happened.
“We actually wouldn’t mind if it went on longer if we didn’t see it happening, and so night work might be an option if it is managed properly.”
He added: “Businesses are still recovering from the last set of roadworks, but if you bring new sets of roadworks and Leith becomes a no-go area we will be set back as we were before.”
Lesley Hinds, the city transport leader overseeing the tram project, said local residents would be closely involved in any decision over the time and place of the work and that the 7pm-2am period was one of several options.
She added: “There are a lot of good ideas and proposals that we want to talk to the Leith community about. We’ll also need to see how practicable the options are before commenting on any specific improvements or exactly how the work will be carried out.”