The sprawling Haymarket Roundabout at the northern end of Elizabeth Street, at the edge of the CBD, has four entry points, three tram stops, and carries 25,000 vehicles a day.

Belying the nickname, there have been no reported deaths at the junction between Elizabeth Street, Royal Parade and Flemington Road. But the roundabout has been the scene of 14 crashes since 2012, resulting in at least 23 injuries.

Motorcyclists have been hit the most (five crashes) followed by cyclists (four crashes), pedestrians (three crashes) and motor vehicles (two crashes).

The government is now setting aside $100,000 to develop a business case to improve safety at the site, where trams in the afternoon peak are regularly blocked by gridlocked traffic.

Separated bike lanes, upgraded pedestrian crossings and giving public transport priority are all being considered as possible solutions.

"The Haymarket roundabout is one of the most congested and confusing intersections in Melbourne - that's why we're investing in a business case to find the right solution drivers, pedestrians, cyclists and public transport users," said Minister for Roads and Road Safety, Luke Donnellan.

In a 2016 TAC-funded online interactive survey, cyclists pinpointed the roundabout as one of Melbourne's worst spots for riding a bike.

The Bicycle Network's chief executive Craig Richards said almost 1000 cyclists head into the roundabout from Royal Parade between 7-9am on weekdays.

"With the development of the new underground station at Grattan Street, and the continuing expansion at the University and around the Parkville bio-medical research precinct, Haymarket needs a completely new, bike-friendly intersection," he said.

"There are some brilliant examples of roundabouts and intersections in Europe that give bikes a greater priority that we don't have in Australia. We have an opportunity here to build for the future."

Victoria Walks' executive officer Dr Ben Rossiter said the roundabout was "diabolical to walk around".

Over 1000 pedestrians cross in the morning peak.

"If you walk from Elizabeth Street down to Flemington Road, you have to cross four legs of traffic lights to get there. Intersections like this should not be in the inner city, they are anti-pedestrian.

Opposition public transport spokesman David Hodgett said $100,000 to develop a business case "sounds like a lot of money to spend on planning a roundabout".

The business case comes after a $2.4 million upgrade to the roundabout in 2011 to improve safety.