The unsealed road is a back-route accessing subdivisions on the southern side of the township and calls have long been made for it to be upgraded.
Timsfield woman Susan Allison launched a petition to get the road sealed more than a year ago.
It has been supported by Wanaka councillor and fellow Lake Hawea resident Jude Battson.
Mrs Allison said the unsealed road was unsafe for pedestrians because of the hazardous corrugations, which unsettled many motorists.
Clouds of dust raised by vehicles during the summer were also a problem for many residents living beside the gravel road.
"It is a heavily used road. Sealing it will make it much safer ... It is definitely good news," Mrs Allison said.
Wanaka Community Board members were told this week the sealing would take place this month.
Pedestrian islands will be built in Anderson Rd in Wanaka to provide a safer crossing point for school children travelling to a growing education precinct in the town's eastern suburbs.
One island will be installed in Anderson Rd near the busy intersections with Matariki Pl and Terranova Pl and another may also be built in Anderson Rd near Reece Cres.
