About 2,600 new homes will be built in two new neighbourhoods in Horley.
The improvements will be funded through contributions from the developers of the new homes.
The highway improvements will include improving cycle and pedestrian facilities across the town as well as traffic calming and junction improvements.
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The work, which will be carried out in phases as funding becomes available, starts today in Station Approach to improve pedestrian access.
A full programme of improvements will be presented to the Local Committee on 2 June.
The improvements will also build on the county council's successful investment in the Fastway bus service and improvements being made to Horley Railway Station.
David Munro, Executive Member for Transport, said: "Like all authorities in the south, Surrey has targets for creating more housing.
"What the council is ensuring through these improvements is the infrastructure needed for the thousands of new residents will be in place.
"Making sure the work is paid for buy developer contributions means not only will the new residents benefit from modern services, but current residents will see improvements as well."
(CD/JM)
