Gloucester's south west bypass is to benefit from �10.9m in funding to start the third phase of the project. The money was promised on Friday by Transport Minister John Spellar on a visit to the city.
It brings the total amount allocated for the scheme by the government to �22.2m.
Work by Norwest Holst Construction Ltd on the third phase of the bypass is now expected to start later in April and be completed by March 2005.
Speaking in Gloucester Mr Spellar said he believes the bypass will bring environmental benefits to the residents of the city by taking away traffic from the centre.
M5 access
"It will improve access to the city centre and reduce journey times," he added.
Some local residents also believe the bypass could regenerate the local economy by speeding up the redevelopment of brown field sites in and around the city.
The county council says work on the fourth and final section of the bypass will begin once houses built by developers are occupied and a further �6m in funding has been secured.
Plans for the bypass were initially approved in 1994 and two sections of the road have already been completed.
Once finished, the project will provide Gloucester with a new link to the M5 and should relieve traffic congestion on the existing A430 Bristol Road, say the council.
The total cost of the bypass is estimated at �38m, with the county council contributing �1m and developers likely to contribute over �14m.