A cluster-based hierarchical location model for the selection of the proper locations and scales of urban transit hubs was developed with the objective of minimizing the demand-weighted total travel time. As an improvement to previous work, the proposed model has the following unique features: (a) it incorporates a hierarchical hub network topology that uses the concept of hub hierarchy establishment, route categorization, and service zone clustering to capture the critical operational issues for the transit network in an efficient manner and (b) it extends the previous nonhierarchical model to account for the impacts of hubs with various hierarchies as well as their interactions with lane use restrictions. An enhanced set of formulations along with the linearization approach was used to reduce significantly the number of variables and the computing time required to achieve the global optimum. The results of a case study in Suzhou Industrial Park in China revealed that the proposed model and solution method are quite promising for use in the planning of hub locations for the transit network. Sensitivity analysis of the performance of the system was also done to assist planners with the selection of the hierarchical structure and the design of transit routes.