The New Zealand Transport Agency has confirmed the highway between Evansdale and Waitati will be widened 1.5m on both sides within the next two months.
Narrow shoulders on the short stretch of highway, next to Blueskin Bay, have been labelled a hazard for cyclists.
Operations manager Murray Clarke said the agency was responding to concerns about safety.
The issue of the "missing link" was raised by Waikouaiti Coast Community Board members, deputy chairwoman Geraldine Tait and Dr Nancy Higgins.
Ms Tait said yesterday she thought the project might have become a victim of cost cutting in the agency's recently announced transport plan.
"So I'm delighted to hear it hasn't gone down the drain."
In some places, there was already a 1.5m shoulder but in others the shoulder was narrow or "really sloping and gravelly", Ms Tait said.
Many recreational cyclists from Dunedin rode to Waitati at the weekend, but were put off cycling further because of the hazards of the highway's narrow shoulders.
"That bit of highway is a nightmare."
However, she could not recall any accidents involving cyclists on the stretch of highway.
"I know of a lot of cyclists who just plain avoid it."
Once cyclists reached Warrington, some used footpaths, she said, and beyond that the coast road had low traffic volumes.
She hoped the new shoulders might be separated from the road with vibration-inducing "rumble strips" to make the highway even safer for cyclists.
