Work on the £15 million Bury St Edmunds Eastern Relief Road (ERR) is due to start in January, next year.
Planners say the road - which will link Skyliner Way and the Suffolk Business Park on Moreton Hall to junction 45 of the A14 at Rougham - will take no more than 18 months to complete.
On Tuesday, members of St Edmundsbury Borough Council agreed, unanimously, to grant £3 million towards the construction costs of the ERR, with a further £10 million of funding due to come from the New Anglia Local Enterprise Partnership and £2 million from Suffolk County Council.
Cllr John Griffiths, leader of St Edmundsbury, said: “After years of effort we have come extremely close to seeing work start on the Eastern Relief Road to help deliver the subsequent homes, jobs, education and leisure facilities.
“It benefits not only Bury St Edmunds and West Suffolk, but further beyond.”
A spokeswoman for the county council said tenders, returned from bidding contractors, were currently being assessed for quality of bid and cost.
She said the ERR would be constructed in phases and the first ‘western’ section - 600 metres from the roundabout next to Bury Audi’s showroom to a new roundabout - would open in August 2016 to serve the new Moreton Hall School.
Negotiations are continuing between the council and Churchmanor Estates in respect of using a Compulsory Purchase Order (CPO) to unlock the final piece of land needed for the development, owned by Rougham Estate.