The road, from College Rd to Silverstream, will attempt to improve the efficiency and safety of the freight route between Hawke's Bay, the Manawatū and Tairāwhiti and improve the connection to Napier Port.
Regional Economic Development Minister Shane Jones announced capital investments in land, air and sea assets across the country.
"I spend a lot of time in the regions and one bugbear I consistently hear about is roads," he said.
"Officials from the Provincial Development Unit and the New Zealand Transport Agency have worked together to identify which roading improvements are ready to go but required funding"
Jones added: "This investment is expected to contribute to regional economic development while providing safer roads, safer bridges, and easier to access stopping points."
Mayor of Central Hawke's Bay Alex Walker said the SH2 College Rd to Silverstream project is one that the community had been promised for some time.
"I'm pleased that NZTA have committed to putting a focus on its timely completion, through a monetary contribution towards operational resource support," she said.
"I look forward to seeing this project bought to life, alongside the highly-anticipated completion of the improvements currently under way between Waipawa and Waipukurau."
Napier MP Stuart Nash said regional economies like Hawke's Bay's depend on transport infrastructure, including roads, rail and ports.
"The latest investments through the Government's infrastructure upgrade programme are great news for businesses, residents and communities of Hawke's Bay.
"Safety is our top transport priority, and these investments will mean safer roads for the community around the Hawke's Bay, and mean less traffic congestion, too."
Nash added: "Hawke's Bay is already seeing the benefits of new investment which has enabled KiwiRail to repair and re-open the Napier-Wairoa rail line."
Construction is due to get under way on some projects by the end of August.
