Work on the Crewe Green Link Road in Cheshire is to begin, following agreement by the government that the Department for Transport will fund up to £15.6m of the £26.4m total cost.
The scheme will provide transport links to Basford, as well as a new bypass to the south east of Crewe. Transport Secretary Patrick McLoughlin said: "This scheme is great news for Crewe and will support the economic growth and regeneration of the town, including the 'All Change for Crewe' strategy.
"The £15.6m we are putting into this project shows that the we are serious about investing in the infrastructure the country needs to drive economic growth, both locally and nationally."
The scheme consists of a 1.1 km long dual carriageway road from the existing bypass on the A500 to the A5020 passing under the Crewe-Stoke Railway.
The main works are scheduled to start immediately, with completion of the scheme expected in November 2015.
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