The Ōmōkoroa Road upgrade will now go ahead, after the Western Bay of Plenty District Council and the New Zealand Transport Agency reached a funding agreement.
The $8 million project, which the New Zealand Transport Agency will fund 51 per cent of, will be from Western Avenue to Tralee Street.
Western Bay of Plenty District Council mayor Garry Webber said this "strategic" piece of road is critical to cater for population growth in the area.
"The project will provide a safer environment and amenity for residents, motorists, cyclists, and pedestrians," said Webber.
Construction will include the relocation of underground services and power lines as well as upgrading stormwater pipes and widening the road.