According to the capital's Socialist mayor, Anne Hidalgo, the speed limit along the entire 35-kilometre (22 mile) Boulevard Peripherique -- known as the "Periph" -- will fall to 50 km/h (30 mph) from 70 km/h (44 mph) now.
The signage for the new speed limit is expected to be fully installed by October 10.
The move has triggered criticism from drivers and other opponents, with the right denouncing the measure as "socially unfair."
The beltway is one of France's busiest thoroughfares, used by around 1.2 million drivers every day, most of them from the region of Ile-de-France that includes Paris.
But Paris authorities say they want to improve the quality of life and reduce noise pollution for the 550,000 people living nearby the Periph.
"When you reduce speed, you reduce noise for all the people who live near this ring road," David Belliard, the mayor's ecologist deputy in charge of transport, told reporters.
"We're going to give them a better quality of life," he said, adding that locals would also sleep better.
"The right to sleep is extremely important."
BruitParif, an organisation that measures urban noise pollution, expects the measure to result in a 2 to 3-decibel drop in noise levels.
City officials also argue that the move will lead to fewer road accidents. Some experts also argue that the measure will help reduce emissions and improve air quality.
With average daytime speeds estimated at 37 km/h, the new limit is only likely to have a major impact at off-peak hours.
Valerie Pecresse, the right-wing head of the Ile-de-France region, said on Tuesday the lower speed would disproportionately affect people working night and early-morning shifts.
She condemned the measure as "socially unfair," and a number of industries including hotels and restaurants have struck a similar note.
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