Council staff were now evaluating tenders for the Wansbeck St project and expected a contract would be let next week.
The project is part of the Harbourside walking and cycling track development.
The NZTA funding towards Gardiners Rd was a "welcome surprise".
The council had budgeted to pay for sealing the road entirely from its own funds.
Now it would need to contribute less than half to the $150,000 project.
Preliminary work has already begun and it was hoped to have the road sealed by early next month, roading manager Geoff Young said.
Gardiners Rd has been used as a bypass since February last year when a portion of Beach Rd between Gardiners Rd and Thousand Acre Rd was badly affected by coastal erosion.
It has a 50kmh speed limit and there have been accidents.