It had been anticipated that the St Andrew Square station would shut this month and remain closed for more than a year as more tracks are laid in York Place.
The move would have forced the facility to temporarily relocate – adding to the chaos for commuters and visitors to the Capital.
However, yesterday it emerged that a plan had been put in place to allow the station to remain open after all.
The solution will see one lane in York Place remain open solely for the use of the buses driving out of the station.
The city’s transport leader, Councillor Lesley Hinds, said: “We have been listening to the local community and bus operators, who stressed that access to the bus station during the course of the tram works was a high priority.
“However, it was also important to balance this with the need to continue to make good and steady progress to complete the works.”
Buses, along with taxis and cars dropping passengers off, will now be able to access the bus station via a diversion route along Leith Street, Little King Street, St James Place and Elder Street.
The council insisted that checks had been carried out to ensure the narrow route was wide enough for the large coaches to drive down.
The length of a loading bay in one of the tightest parts of the route has been restricted to ensure the vehicles will be able to pass safely. The buses will then leave the station by turning onto Elder Street, before then making their way onto the single lane in York Place.
The plan to allow the bus station to remain open, which will see access maintained to the St James Centre and John Lewis car parks, was put in place following talks between the council, contractors and bus operators.
The measures are expected to remain in place until the end of next year.
It was also revealed that buses will have access along all of Princes Street from this weekend, with temporary traffic lights being installed at the bottom of South St Andrew Street to allow traffic to flow in both directions through a single lane, from Waverley Bridge to the Balmoral Hotel.
South St David Street will be shut to southbound traffic travelling towards Waverley Bridge at its junction with Princes Street, with traffic diverted along Hanover Street, The Mound and Market Street.
It is hoped that Princes Street will be fully open to buses, taxis and bikes from the end of November, when South St David Street will also be able to completely reopen.
From next Saturday, the west end of York Place will be closed to all traffic between Queen Street and Elder Street.
During the next phase of the works, pedestrian access to York Place will be maintained along footpaths providing access to shops and businesses, with crossing points installed in areas affected by the works.
A traffic lane will be available to provide access for emergency services.
The council has said it will offer support to businesses in York Place to allow deliveries to be made.