Organisers believe they will be able to attract new visitors to the Capital by using the area as the main draw - despite its longstanding reputation as a magnet for stag and hen nights.
It will be marketed on its unique atmosphere in the 30,000 campaign, backed by VisitScotland, the city council and the Edinburgh World Heritage Trust.
Selling points will be the Grassmarket's history and architecture, its independent shops and continental-style pavement cafe culture.
The promotion - which is timed to coincide with work starting on a multi-million pound revamp of the thoroughfare - has included the creation of a new logo, tens of thousands of glossy brochures, a new website, and a series of e-mail campaigns.
A 5 million project to improve the look of the Grassmarket is expected to be completed by this time next year and will extend the space for pavement cafes and create a major new events arena.
A marketing company has begun work to place articles in glossy magazines across the UK and into Europe, promoting everything from fashion boutiques and fine dining restaurants, to the historical and ghost tours that visit the Grassmarket, and its centuries-old pubs.
Sara McMillan, spokeswoman for the Edinburgh-based marketing company Niche Works, said: "Part of the work we're doing is to help the traders promote the area while the work to improve it is ongoing over the next year.
"But it's also about improving the whole image of the Grassmarket, and highlight just how much it has to offer."
Among the stores expected to be at the heart of the campaign are vintage fashion shop Armstrong's - which boasts celebrity customers such as Kylie Minogue and Eddie Izzard - the "liquid deli" Demijohn, Bill Baber's designer clothing outlet, Mr Wood's Fossils, and hat store Fabhatrix.
Jos Bastiensen, head of the Grassmarket Traders' Association, said: "There's no doubt the Grassmarket area does still have a bit of a mixed reputation and an image as a bit of a drinking den.
"We believe the Grassmarket has lots of very good selling points. The plan is to try to replicate the way that Camden or Covent Garden are promoted in London and use the Grassmarket as a way of bringing people to Edinburgh.
"Many of us feel that the Grassmarket is still hidden away and is being bypassed by people for one reason or another."
The Grassmarket's history of trading dates from the 1300s. It became notorious for huge crowds that flocked to public hangings, marked today in pubs such as The Last Drop and Maggie Dickson's.