The Dunedin City Council has dropped plans for a notice of requirement, under which it planned to acquire land from 33 properties for the project, using the Public Works Act if residents refused to sell.
The drawn-out process has cost an estimated $250,000, though the New Zealand Transport Agency has funded 65% of that money.
The leaders of the two groups set up to fight the project yesterday said they had put time, effort and money into their fight, and now the council had dropped the plan.
Riccarton Rd Action Group secretary Glen Munn said she was "disappointed but not at all surprised" by the move, while Riccarton Rd West Safety Society chairman Brian Miller said he was disappointed he would not get his day in court to fight the council.
While the council has said the issue was one of safety, some residents have said it was more about the council wanting to develop the road into an arterial route, and the issue had dragged on since the 1990s.
The latest episode in the saga was a hearing before a panel of commissioners in February, to decide on an application for the notice of requirement.
That upgrade, of a 4.2km stretch from Gladstone Rd South to State Highway 87, was to have included provision of a shared path for pedestrians, cyclists and horse riders, widening and realignment, the provision of safety barriers, and widening of bridges and culverts.
In March, an interim decision supported modifications for the $5.4 million upgrade, though commissioner Allan Cubitt said the decision was conditional on substantial modifications to the plan.
That included removing the proposed shared path, as the panel was not convinced it was needed as part of the road's upgrade.
That, in turn, meant a new design plan for the road's upgrade would need to be drawn up.
Dunedin city councillor Andrew Noone yesterday asked for residents to be patient while council staff took yet another look at the issue.
Cr Noone said the council had made the decision to withdraw the notice of requirement at a meeting on May 17.
The reasons were the commissioners' decision, and an indication from the New Zealand Transport Agency it would not fund the modified plan.
But the council "remains committed to addressing the road safety issues" the road had, so funding would be retained in the council budget.
The next step was for council staff to do more work on the safety issues, and for that to be considered in next year's annual plan.
Mr Miller said fighting the proposal had affected relationships between residents with differing views.
Uncertainty had affected land values and made property planning impossible.
Ms Munn said she did not believe the council would choose a lesser option for the road.
"It just means they will come back harder next time."
