Truong Huu Hiep, director of the Lam Dong Province Department of Transport, said Thursday public opinion is being sought for installing them at major intersections in downtown Da Lat that are often congested.
It is an unprecedented move in a town famous for not having traffic lights or police officers on its streets.
Hiep said the lights are likely to be trialed in places notorious for congestion such as the Phan Chu Trinh crossroads, Da Lat University five-way intersection, February 3 Roundabout, Ba Trieu-Tran Phu Intersection, and Ong Dao Bridge Roundabout.
If they work well, town authorities would consider installing them elsewhere, he added.
The lack of lights is a small quirk that adds to the charm of the highlands town but the travel boom in recent years has caused traffic congestion, especially during weekends and holidays.
Lam Dong is offering a prize of VND1 billion ($43,346) for the best solution to the congestion in a competition.
A committee will pick the five best ideas to resolve traffic congestion before choosing the winner.
The entries must outline methods to resolve the traffic congestion until 2025 while effectively utilizing available land for infrastructure. The deadline falls on April 14.
In 2018 Da Lat considered building a seven-story public parking lot in the downtown area and banning buses with over 45 seats from entering the area, but the plans remain on paper.
The town was originally designed for around 90,000 people in the early 20th century, but its population has now ballooned to nearly 230,000 and it gets around seven million visitors a year.