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Part of Gorge Rd is to get a $1.5 million footpath upgrade, which should improve safety and pedestrian facilities.
The Queenstown Lakes District Council utilities committee decided on Monday to proceed with the project, between Henry St and Industrial Pl.
It had been due to start last year but was postponed because of budget restraints.
The footpath will be replaced, a new pedestrian refuge island established beside the Robins Rd intersection and a bus stop added in Gorge Rd opposite Wakatipu High School near the pedestrian crossing.
Landscaping at the northern entry to Queenstown will be upgraded and the line markings on the footpath changed.
The work is estimated to cost $1.52 million. QLDC project manager Steve Hewland expected NZTA funding could also be sought.
The works will be put out to tender, with construction expected to start in November. The work is due for completion next January.