The utilities committee backed the proposed two-lane roundabout, the island of which would be 4m wider than the 20m wide roundabout that intersects State Highway 6 and Lucas Pl in Frankton.
The roundabout on State Highway 6 would be located on 200m southwest from Glenda Dr and the speed limit in the area could be reduced by 10kmh to 70kmh.
The roundabout could be built by the end of next year, if not sooner, but the big unknown on progress would be the land use consent process, which will be out of the council's hands.
The utilities committee recommendation will be tabled at Tuesday's strategy committee for approval of the council's notice of requirement.
This will start the process of obtaining land use consent to acquire the land and build the roundabout.
State highways are the responsibility of the New Zealand Transport Agency (NZTA), while the council is responsible for neighbouring link roads, such as the unformed eastern access road and Glenda Dr.
The council's share of the project would be $2.2 million and NZTA funding could contribute half.
Council transportation planning manager Denis Mander said there had been on average 1.2 injury crashes per year between 2004 and 2008 at the Glenda Dr intersection.
A crash rate nearer to 0.3 per year might be expected for the type of intersection and its volume of traffic.
NZTA changes in 2008 had "significantly reduced" the number of crashes, but a fundamental improvement was needed.
"What we face in the Frankton Flats area is growing traffic demand as a consequence of increasing development," Mr Mander said.
"What is needed is a long-term, robust solution that will improve safety and cope with growth in traffic.
"It's also the gateway to Queens-town, so it's actual design will be one of the influences on what people experience."
Regular Glenda Dr intersection users described it as dangerous and welcomed the proposed roundabout.
Trucks operated by several freight and construction companies used the intersection more than 15 times daily.
Procure Concrete manager Dave Le Comte said he was pleased the council was doing something.
"Turning right from Glenda Dr to Arrowtown, is the nasty turn there, and turning right into Glenda Dr from Queenstown.
The roundabout is a good idea and if it means getting in and out of the industrial area safer, that's got to be good."
ATL Haulage Ltd yard supervisor Graeme Rose said it was "pretty dangerous pulling out and it's had accidents and near misses because they've got a wee lane between the main lane and only some people know what to do. [If] you ask me, it's an accident waiting to happen".
Mr Rose called for signs to say "turn left on the merging lane" at the Glenda Dr intersection with SH6, instead of the sign that says "turn left at any time with care".
"The stop sign for the right-hand lane users is confusing non-regular Glenda Dr users in the left lane and it's behind crashes [earlier this year]. Merging out of the left-hand lane into the main road and turning into Glenda Dr is where most of the accidents have happened."
