A formal model of urban traffic management in a network of four intersections is developed. The aim of the study is to reduce the queues of cars in front of traffic lights and increase the outflow of cars from each intersection in the network. The methodology used for the formalization is the application of bi-level optimization. It integrates and coordinates more goal functions, constraints, and optimization variables. This allows greater closeness between the developed model and reality. For the bi-level model, the optimization problems for the two hierarchical levels are defined. An additional logical modification is applied in the optimization algorithm. It allows synchronizing the traffic control in the network. The presented numerical results of the simulations are compared with the solutions of a classical nonlinear problem (one-level problem). The comparisons give preferences to the bi-level optimization.