Clutha District Council manager district assets Jules Witt said the NZTA's decision to fund its share of the $75,000 investigation and design cost was "very encouraging".
The bridge spans the Catlins River 12km west of Owaka and has been closed since last November when inspections revealed significant damage.
In February, the council agreed to replace the existing structure with a single-lane concrete bridge, and applied to the NZTA for 70% of the $700,000 cost.
However, the NZTA deemed the bridge an uneconomic structure.
It asked the council to provide more detailed information about how the loss of the bridge would affect land values and activities in the area.
Having supplied that information, the project has been separated into two phases - a $75,000 investigation and design phase, and a $625,000 construction phase.
Mr Witt said he hoped that once the investigation and design phase was completed, the NZTA would agree to fund its share of the remaining $625,000 for construction.
Catlins ward Councillor Kevin Thompson was thrilled that the NZTA had seen its way clear to fund the investigation and design phase.
"The river was up a wee while ago, and people had to go 30km round to get out of Tawanui."
Mr Thompson said the people of Tawanui would be very relieved if the bridge was renewed.
The council is also in the process of removing the failing structure, which is the last remaining part of the second bridge over the Clutha River, before it collapses and creates a dam.
"We would like to save a few beams for a seat at the museum, Mr Thompson said.
"We would like to selvage a bit of timber, just to remind us of the bridge."
