The decision comes after formal consultation in late 2019 to introduce safer speed limits in the area.
The changes will reduce the existing 100km/h limit to 80km/h, and 70km/h limit to 50km/h in places.
The Automobile Association's submission to NZTA said crash data did not indicate this was a "high-end priority 'unsafe' stretch of road" and that there was not enough information to either support or oppose the changes.
Its submission said the proposal had little to no data on the expected benefits of the speed reduction, and there was no mention of the road's "inter-regional economic significance or its hierarchy".
NZTA estimates that over the 2.7km route, the increase in travel time will be about 21 seconds.
NZTA regional relationships director Emma Speight said NZTA had heeded the call to make the road safer.
"Our top priority is to reduce injuries and save lives, and no matter what causes a crash, speed is always a factor in the severity of the crash outcomes," she said.
"Between 2009 and 2018, there were 21 crashes on this road. Two people died and three people were seriously injured. The speed limit changes will make SH3 safer for everyone who uses it.
"Both the council and community have called for safer speeds. During engagement and formal consultation, locals told us they feel unsafe and that the speed limit needs to be lowered to reduce the number of crashes and make it safer."
Whanganui deputy mayor Jenny Duncan said she had been urging NZTA to reduce speed limits in the area for several years.
"This is long-overdue and welcome news," she said.
"For both the residents of Great North Rd and its contributing streets and for those who use or pass Ray's petrol station."
The late Ray Stevens, who died in February last year, was a former Whanganui district councillor who owned the service station at the intersection of SH3 and Rapanui Rd.
Stevens joined Duncan in campaigning for speed reduction while serving on the council and continued to lobby for change as an individual.
Duncan said Stevens would be rapt to know that the issue had finally been addressed.
"This is something that should have happened a long time ago," Duncan said.
Local resident Bill Simmons did not believe the speed reductions alone were enough to alleviate problems.
"We have lived in this area for 33 years and it used to be a fairly quiet stretch of road," he said.
"We have seen the traffic volumes grow and grow along with the number of accidents.
"Even with the reduced speeds, it is still very busy and if you're trying to turn right into Pickwick or Blueskin roads you are wedged between traffic that is accelerating. There are no right-turn lanes and no refuge for you as a motorist. Turning lanes, double no-passing lines and no-stopping lines in these high-risk areas would dramatically improve safety."
Simmons also believed a roundabout at the SH3 and Rapanui Rd intersection would make a difference.
"The roundabout at the southern gateway is very efficient for slowing traffic and I believe it would work well at this end," Simmons said.
Whanganui District Council was also concerned about the safety of the Blueskin Rd intersection and recommended that NZTA undertake a safety audit with a view to upgrading the intersection.
Their submission to the review expressed concern that: "The increase in traffic turning right from the state highway into Blueskin Rd is of particular concern with the absence of a right-turning bay."
The Whanganui Rural Community Board made the same comment in their submission.
Other submissions called for speed cameras, pedestrian crossings and no-parking zones.
Speight said the new limits were safe and appropriate for what was now a residential and semi-rural area and would help make intersections along the road safer.
"The feedback encompassed a wide range of views which were all taken into consideration, alongside results from our technical assessments, before making our decision," she said.
"We have listened to the community throughout this process. We appreciate that while some people will be very pleased with the decision, others may be disappointed."
The new speed limits will be 50km/h from 30m south of Turere Place and Great North Rd intersection to 200m north of the Tirimoana Place and Great North Rd intersection where the speed limit is currently 70km/h. The speed limit will be 80km/h from 200m north of the Tirimoana Place and Great North Rd intersection to 100m north of the Blueskin Rd and Great North Rd intersection where the current speed limit is 100km/h.
Contractors will begin installing new signage ahead of the new speed limits taking effect from December 18.