The shingle road has been used as a bypass since February last year when a portion of Beach Rd between Gardiners Rd and Thousand Acre Rd was cut by coastal erosion.
Gardiners Rd has a 50kmh speed limit and there have been accidents.
Protection work and reinstating Beach Rd was expensive and the council hoped to seal Gardiners Rd as a permanent route between Oamaru and Kakanui.
It put the 1km-long sealing project in its roading programme for this financial year.
Council assets group manager Neil Jorgensen said the council still hoped it would get a subsidy.
If it did, it would meet 67% of the $130,000 project cost.
Mr Jorgensen said the council did not expect it would get a subsidy from the national programme, but was confident it could qualify for a regional subsidy.
