The scheme aims to ease congestion

Transport Minister Iain Gray announced that the �120m project could be completed by 2010.

He said it would be possible to complete the road earlier than originally estimated because it will be promoted by the Scottish Executive as a trunk road.

The executive will also meet four-fifths of the construction cost.

The decision has been welcomed by Aberdeen and Aberdeenshire Councils.

We will be working in partnership with both local authorities to progress this important project Iain Gray Transport Minister

The two local authorities have agreed to split the remaining costs of the project, which will come to just under �23m.

Local business leaders have hailed the decision as a major catalyst for economic growth in the north-east.

Mr Gray visited Aberdeen as the North East Scotland Transport Partnership (Nestrans) set out its long-term vision for improving transport in and around the city.

The minister welcomed the work being done to create a "modern integrated transport system" for the area.

"The western peripheral route is just a part of that transport strategy and as part of a wider package of improvements, the new road will help tackle some of the city's congestion and pollution.

Design work

"I am pleased that our decision to promote this project as a trunk road means it can now be completed earlier and we aim to have it open in 2010.

"We will be working in partnership with both local authorities to progress this important project and with an agreement reached about funding work can move on to the next stage."

Detailed design work on the project will now get under way.

It is hoped to start construction late in 2007, with the project due for completion by the end of 2010.

It had previously been proposed that the route would take nine years to complete.