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."
Traders who say they are angered by the decline of Perth city centre have launched a campaign to "re-energise" the high street.