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NZ Transport Agency regional manager Colin MacKay said funding to build the long-awaited two-lane bridge on State Highway 8 was now in place, and plans "well advanced" to call tenders during coming weeks.
The current single-lane bridge was built in 1887 and is one of the last wrought-iron bridges remaining on the national highway network.
Mr McKay said a two-lane bridge was required to cope with today’s higher traffic volumes, and heavier trucks now using the route.
The new bridge would be built downstream of the historic bridge, and designed to meet earthquake standards and handle future traffic growth.
The old bridge would remain for pedestrians and cyclists, as a link to the popular nearby Clutha Gold walking and cycling trail.
Clutha Mayor Bryan Cadogan welcomed the news.
"This is not only great news for Clutha but also the wider region.
"It is exciting to see the growing momentum and belief from our partners in funding this critical core infrastructure.
"Projects like this are the building blocks to our collective bright and prosperous future, and we appreciate the commitment to enabling this project to get under way."
The new, 195m curved steel girder bridge will be supported by four piers, the central one located on a prominent rocky outcrop on the riverbed.
The deck will sit about 12m above the average river level.
A 2m-wide path will be provided over the new bridge for pedestrians as an alternative to using the historic bridge.
The bridge will cost about $20million and is expected to take two years to build.
Community input played a key part in influencing the alignment of the new bridge, which will continue to run in front of the Beaumont Hotel.