The Better Perth group has blamed online shopping and "inertia" for dwindling profits.
More than 50 traders will open later night with special events and promotions to tempt shoppers back into the city centre.
Perth and Kinross council is backing the event.
Private car parking company Smart Parking said it would be waiving charges on Thursday and Friday afternoons in the run up to Christmas as its way of supporting the campaign.
The traders said their "First Thursday" promotion could be a model that other "blighted" towns and cities in the UK could adopt.
Businesses involved in the Better Perth group range from small independent boutiques and cafes to big department stores
Hairdresser Charlie Taylor said: "Perth is a beautiful city that has been laid waste by the growth in out-of-town developments and online shopping.
"After years of city-centre decay, business owners have had enough and are doing things for themselves. We want to reinvigorate Perth and reawaken the sense of community that has been gradually ebbing away over the past years."
Perth and Kinross Council said it was pleased to work with businesses to help promote economic growth.
A spokeswoman added: "This project is a good example of how businesses and the council can work together to enhance Perth's reputation as a visitor destination, and also to celebrate the diversity of what the city has to offer in terms of retail and food and drink, with many award-winning businesses involved.
"Research has shown that consumers want to be able to shop at times convenient to them and the First Thursday campaign is a great way to provide a set late-night opening that people can put in their diaries."

The blaze at the former Pontins resort at Brixham destroyed the 42-acre site in June 2014.
Rick Edwards, of Higher Green, South Brent, was given a 12-month jail term suspended for two years at Exeter Crown Court.
The 20-year-old was also given a year's supervision order to prevent further offending.
Prosecutor Gordon Richings said Edwards had lit a small piece of wallpaper and the flames had rapidly got out of control. He admitted in interview he started the blaze "for fun".
"A report on the fire indicated the arcade area had been completely demolished and the pool area and former ballroom were also damaged," he said.
Kevin Hopper, for the defendant, said his client had never intended to cause such a serious incident.
Mr Richings said the fire increased the final cost of demolition because it made it more difficult to isolate and remove asbestos.

Members of the Clwyd North Division are against the changes at Glan Clwyd Hospital, Bodelwyddan.
These could see clinical staff transferred to Ysbyty Gwynedd and Wrexham Maelor hospitals from 6 April.
Betsi Cadwaladr University Health Board said it was "disappointed" by the vote.
Doctors, who held the vote after discussing the plans at a meeting on Monday, said the recent decision to withdraw consultant-led obstetric and gynaecology services at the hospital for 18 months has left them feeling demeaned.
Dr Richard Lewis, secretary of the Welsh British Medical Association, said that following a number of high-profile resignations at the board two years ago after a damning report on management failings, communications between the board and the wards remained poor.
"The situation in terms of the board's ability to communicate with its frontline staff are as bad if not worse than ever," he told BBC Wales.
"That gap seems not be closing; in fact on this particular issue it seems to be widening, which is a real worry."
Health board executive medical director Prof Matthew Makin said: "We fully acknowledge the strength of feeling regarding the board's decision from our clinicians but maintain that our primary motivation for making this pre-emptive urgent interim change is to protect the safety of mothers and babies."
Meanwhile, AMs in the Welsh assembly agreed a motion on Wednesday calling on the health board to "ensure the continuity of consultant-led maternity and other women's clinical services at each of the three district general hospitals in north Wales".
Conservative health spokesman Darren Millar, AM for Clwyd West, said: "I welcome the fact that not a single Assembly Member voted against our motion to protect maternity services from the threat of downgrading."
Traders who say they are angered by the decline of Perth city centre have launched a campaign to "re-energise" the high street.
[NEXT_CONCEPT]
A man who set fire to a derelict holiday park "for fun" has been sentenced.
[NEXT_CONCEPT]
Doctors unhappy at proposals to close consultant-led obstetrics and gynaecology services at a north Wales hospital have passed a vote of no confidence in the health board.