The Holbeck scheme – thought to be a first in the country – allows street sex workers to operate in a designated area during certain hours without fear of arrest.
Its future had been thrown into doubt by the murder of sex worker Daria Pionko in December.
But Safer Leeds today announced the scheme would stay in place, on the provision that some changes be made to the way it is run.
Feedback from residents and businesses showed the idea remained unpopular with some, with about a third of respondents saying they wanted it scrapped.
However, the majority thought it should be continued in its current form or with some changes made.
Safer Leeds, which brings together Leeds City Council, West Yorkshire Police and other partners, said it had learnt “valuable lessons” from the review and public consultation.
A spokesman said: “We’ll be taking these lessons forward in a bid to provide a long-term solution to sex work in the area, balancing the different needs of the community, businesses, sex workers, agencies and support teams.
“We’ve listened closely to the range of strong views expressed on what is undoubtedly an extremely complex issue and acknowledge that some things worked, while others didn’t.”
The review was announced in February following national media attention in the wake of Ms Pionko’s murder.
A Polish sex worker who lived in the city, 21-year-old Ms Pionko was killed on December 22 last year.
Her killer, 24-year-old Lewis Pierre, was found guilty at trial earlier this month and given a life sentence with a minimum of 22 years in prison.
The court heard he repeatedly beat Ms Pionko around the face, head and neck while stealing £80 from her handbag.
Pierre, of Miles Hill Street, Meanwood, then used part of the money to buy a kebab and chips, drinks and cigarettes.
The murder put the scheme, which had been operating for more than a year, under intense scrutiny.
Some reports wrongly created the impression that prostitutes were actively encouraged to work there or that it was safe for them to do so.
They also raised much wider awareness of the scheme, with the side effect that more sex workers were drawn to the area.
The spokesman said: “There is no denying the adverse impact on specific businesses, exacerbated by the intense media spotlight. We will work with them to make changes which lessen the impact.
“There is an ongoing commitment to the community with the regeneration of Holbeck, with significant improvements taking place in both residential and business areas. This has not changed.”
Critics argued that Ms Pionko’s murder meant the scheme had failed to keep sex workers from harm and should be abolished.
But the idea behind the scheme was to address some of the concerns of residents and businesses in an area that had long been known as a red light area.
Research had found that police action, including arrests, prosecutions and anti-social behaviour orders, was failing to reduce levels of prostitution.
Efforts were made to reduce demand by targeting kerb crawlers and make street prostitution untenable.
Safer Leeds said this approach had simply pushed the problem into other areas of Holbeck, made it harder for health and charity organisations to give support, and created distrust between police and the sex workers.
The new scheme set out to reduce issues caused by street prostitution in the area, improve engagement with sex workers and reduce the level of street sex working.
Businesses, residents, sex workers and others were asked for their views on its success as part of the review, which was carried out by an independent company.
Opinions varied, but the majority of residents and businesses were said to support either a continuation of the scheme or amendments to it.
Around a third wanted the approach to be scrapped altogether.
Yesterday the executive board of Safer Leeds, which meets in private, talked through the review findings and agreed the scheme should continue in an amended form.
The Safer Leeds spokesman said: “Having lessened the problems experienced in residential areas and during the day, and to build on the significant improvement in the confidence of sex workers to report crimes and work with agencies and support services, attention will be focussed on providing increased support to vulnerable sex workers with complex needs, particularly addictions, to exit this work.
“Alongside this, targeted enforcement tactics will seek to tackle the number of people coming to the area because of the sex trade.”
The revised approach will seek to balance support for a core group of vulnerable sex workers, who will continue to be allowed to operate within the rules, with a targeted approach to enforcement focussing on those drawn into the area.
There will also be a “robust approach” to breaches in the rules and criminality.
A detailed plan is now to be drawn up, but it will include changes to operating hours and potential changes to the area covered to reflect the impact on local businesses.
Other aspects of the plan will involved the commissioning of support services to enable women to exit sex work over the medium term and the implementation of a tactical enforcement plan to counter those drawn into the area.
The spokesman said: “We will keep the impact of this work under continuous review to ensure it is meeting our aims of supporting vulnerable sex workers to exit the streets, enforcing against criminality, reducing the number of people coming to the area and supporting the community. If this is not the case, further steps will be taken and options considered as appropriate.”